[Title 12 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 2005 Edition]
[From the U.S. Government Printing Office]
[[Page i]]
12
Part 900 to End
Revised as of January 1, 2005
Banks and Banking
________________________
Containing a codification of documents of general
applicability and future effect
As of January 1, 2005
With Ancillaries
Published by
Office of the Federal Register
National Archives and Records
Administration
A Special Edition of the Federal Register
[[Page ii]]
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[[Page iii]]
Table of Contents
Page
Explanation................................................. v
Title 12:
Chapter IX--Federal Housing Finance Board 3
Chapter XI--Federal Financial Institutions
Examination Council 235
Chapter XIV--Farm Credit System Insurance
Corporation 271
Chapter XV--Department of the Treasury 303
Chapter XVII--Office of Federal Housing Enterprise
Oversight, Department of Housing and Urban
Development 325
Chapter XVIII--Community Development Financial
Institutions Fund, Department of the Treasury 551
Finding Aids:
Material Approved for Incorporation by Reference........ 591
Table of CFR Titles and Chapters........................ 593
Alphabetical List of Agencies Appearing in the CFR...... 611
List of CFR Sections Affected........................... 621
[[Page iv]]
----------------------------
Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 12 CFR 900.1 refers
to title 12, part 900,
section 1.
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[[Page v]]
EXPLANATION
The Code of Federal Regulations is a codification of the general and
permanent rules published in the Federal Register by the Executive
departments and agencies of the Federal Government. The Code is divided
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parts covering specific regulatory areas.
Each volume of the Code is revised at least once each calendar year
and issued on a quarterly basis approximately as follows:
Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1
The appropriate revision date is printed on the cover of each
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[[Page vi]]
Many agencies have begun publishing numerous OMB control numbers as
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the revision dates of the 50 CFR titles.
[[Page vii]]
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Director,
Office of the Federal Register.
January 1, 2005.
[[Page ix]]
THIS TITLE
Title 12--Banks and Banking is composed of seven volumes. The parts
in these volumes are arranged in the following order: parts 1-199, 200-
219, 220-299, 300-499, 500-599, part 600-899, and 900-end. The first
volume containing parts 1-199 is comprised of chapter I--Comptroller of
the Currency, Department of the Treasury. The second and third volumes
containing parts 200-299 are comprised of chapter II--Federal Reserve
System. The fourth volume containing parts 300-499 is comprised of
chapter III--Federal Deposit Insurance Corporation and chapter IV--
Export-Import Bank of the United States. The fifth volume containing
parts 500-599 is comprised of chapter V--Office of Thrift Supervision,
Department of the Treasury. The sixth volume containing parts 600-899 is
comprised of chapter VI--Farm Credit Administration, chapter VII--
National Credit Union Administration, chapter VIII--Federal Financing
Bank. The seventh volume containing part 900-end is comprised of chapter
IX--Federal Housing Finance Board, chapter XI--Federal Financial
Institutions Examination Council, chapter XIV--Farm Credit System
Insurance Corporation, chapter XV--Department of the Treasury, chapter
XVII--Office of Federal Housing Enterprise Oversight, Department of
Housing and Urban Development and chapter XVIII--Community Development
Financial Institutions Fund, Department of the Treasury. The contents of
these volumes represent all of the current regulations codified under
this title of the CFR as of January 1, 2005.
For this volume, Ruth Green was Chief Editor. The Code of Federal
Regulations publication program is under the direction of Frances D.
McDonald, assisted by Alomha S. Morris.
[[Page 1]]
TITLE 12--BANKS AND BANKING
(This book contains part 900 to end)
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Part
chapter ix--Federal Housing Finance Board................... 900
chapter xi--Federal Financial Institutions Examination
Council................................................... 1101
chapter xiv--Farm Credit System Insurance Corporation....... 1400
chapter xv--Department of the Treasury...................... 1510
chapter xvii--Office of Federal Housing Enterprise
Oversight, Department of Housing and Urban Development.... 1700
chapter xviii--Community Development Financial Institutions
Fund, Department of the Treasury.......................... 1805
[[Page 3]]
CHAPTER IX--FEDERAL HOUSING FINANCE BOARD
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SUBCHAPTER A--GENERAL DEFINITIONS
Part Page
900 General definitions applying to all finance
board regulations....................... 7
SUBCHAPTER B--FEDERAL HOUSING FINANCE BOARD ORGANIZATION AND OPERATIONS
905 Description of organization and functions... 10
906 Operations.................................. 14
907 Procedures.................................. 16
908 Rules of practice and procedure in hearings
on the record........................... 26
910 Freedom of Information Act regulation....... 54
911 Availability of unpublished information..... 61
912 Information regarding meetings of the Board
of Directors of the Federal Housing
Finance Board........................... 66
913 Privacy Act Regulation...................... 71
SUBCHAPTER C--GOVERNANCE AND MANAGEMENT OF THE FEDERAL HOME LOAN BANKS
915 Bank director eligibility, appointment and
elections............................... 76
917 Powers and responsibilities of Bank boards
of directors and senior management...... 93
918 Bank director compensation and expenses..... 99
SUBCHAPTER D--FEDERAL HOME LOAN BANK MEMBERS AND HOUSING ASSOCIATES
925 Members of the Banks........................ 102
926 Federal Home Loan Bank housing associates... 120
SUBCHAPTER E--FEDERAL HOME LOAN BANK RISK MANAGEMENT AND CAPITAL
STANDARDS
930 Definitions applying to risk management and
capital regulations..................... 124
[[Page 4]]
931 Federal Home Loan Bank capital stock........ 125
932 Federal Home Loan Bank capital requirements. 129
933 Bank capital structure plans................ 142
SUBCHAPTER F--FEDERAL HOME LOAN BANK MISSION
940 Core Mission Activities..................... 147
944 Community support requirements.............. 148
SUBCHAPTER G--FEDERAL HOME LOAN BANK ASSETS AND OFF-BALANCE SHEET ITEMS
950 Advances.................................... 153
951 Affordable Housing Program.................. 163
952 Community Investment Cash Advance Programs.. 186
955 Acquired Member Assets...................... 190
956 Federal Home Loan Bank Investments.......... 197
960 Standby letters of credit................... 199
SUBCHAPTER H--FEDERAL HOME LOAN BANK LIABILITIES
965 Source of funds............................. 202
966 Consolidated obligations.................... 202
969 Deposits.................................... 207
SUBCHAPTER I--MISCELLANEOUS FEDERAL HOME LOAN BANK OPERATIONS AND
AUTHORITIES
975 Collection, settlement, and processing of
payment instruments..................... 208
977 Miscellaneous bank authorities.............. 210
978 Bank requests for information............... 210
SUBCHAPTER J--NEW FEDERAL HOME LOAN BANK ACTIVITIES
980 New business activities..................... 213
SUBCHAPTER K--OFFICE OF FINANCE
985 The Office of Finance....................... 216
987 Book-entry procedure for consolidated
obligations............................. 220
989 Financial statements of the Banks........... 225
SUBCHAPTER L--NON-BANK SYSTEM ENTITIES
995 Financing Corporation operations............ 227
996 Authority for Bank assistance of the
Resolution Funding Corporation.......... 230
[[Page 5]]
997 Resolution Funding Corporation obligations
of the Banks............................ 230
SUBCHAPTER M--FEDERAL HOME LOAN BANK DISCLOSURES
998 Registration of Federal Home Loan Bank
equity securities....................... 233
[[Page 7]]
SUBCHAPTER A_GENERAL DEFINITIONS
PART 900_GENERAL DEFINITIONS APPLYING TO ALL FINANCE BOARD REGULATIONS
--Table of Contents
Sec.
900.1 Basic terms relating to the Finance Board, the Bank System and
related entities.
900.2 Terms relating to Bank operations, mission and supervision.
900.3 Terms relating to other entities and concepts used throughout 12
CFR chapter IX.
Authority: 12 U.S.C. 1422b(a).
Source: 67 FR 12842, Mar. 20, 2002, unless otherwise noted.
Sec. 900.1 Basic terms relating to the Finance Board, the Bank System and
related entities.
As used throughout this chapter, the following basic terms relating
to the Finance Board, the Bank System and related entities have the
meanings set forth below, unless otherwise indicated in a particular
subchapter, part, section, or paragraph:
Act means the Federal Home Loan Bank Act, as amended (12 U.S.C. 1421
through 1449).
Bank, written in title case, means a Federal Home Loan Bank
established under section 12 of the Act (12 U.S.C. 1432).
Bank System means the Federal Home Loan Bank System, consisting of
the 12 Banks and the Office of Finance.
Board of Directors, written in title case, means the Board of
Directors of the Federal Housing Finance Board; the term board of
directors, written in lower case, has the meaning indicated in context.
Chairperson means the Chairperson of the Board of Directors of the
Finance Board.
Executive Secretary means an employee within the Office of
Management of the Finance Board who is responsible for records
management.
Finance Board means the Federal Housing Finance Board established by
section 2A of the Act (12 U.S.C. 1422a).
Financing Corporation or FICO means the Financing Corporation
established and supervised by the Finance Board under section 21 of the
Act (12 U.S.C. 1441) and part 995 of this chapter.
Housing associate means an entity that has been approved as a
housing associate pursuant to part 926 of this chapter.
Member means an institution that has been approved for membership in
a Bank and has purchased capital stock in the Bank in accordance with
Sec. Sec. 925.20 or 925.24(b) of this chapter.
Office of Finance or OF means the Office of Finance, a joint office
of the Banks referred to in section 2B of the Act (12 U.S.C. 1422b) and
established under part 985 of this chapter.
Resolution Funding Corporation or REFCORP means the Resolution
Funding Corporation established by section 21B of the Act (12 U.S.C.
1441b) and addressed in parts 996 and 997 of this chapter.
Secretary to the Board means employees within the Office of General
Counsel of the Finance Board who are responsible for issues concerning
meetings of the Board of Directors.
[67 FR 12842, Mar. 20, 2002, as amended at 68 FR 38169, June 27, 2003]
Sec. 900.2 Terms relating to Bank operations, mission and supervision.
As used throughout this chapter, the following terms relating to
Bank operations, mission and supervision have the meanings set forth
below, unless otherwise indicated in a particular subchapter, part,
section or paragraph:
Acquired member assets or AMA means those assets that may be
acquired by a Bank under part 955 of this chapter.
Advance means a loan from a Bank that is:
(1) Provided pursuant to a written agreement;
(2) Supported by a note or other written evidence of the borrower's
obligation; and
(3) Fully secured by collateral in accordance with the Act and part
950 of this chapter.
Affordable Housing Program or AHP means the Affordable Housing
Program, the CICA program that each Bank is required to establish
pursuant
[[Page 8]]
to section 10(j) of the Act (12 U.S.C. 1430(j)) and part 951 of this
chapter.
Capital plan means the capital structure plan required for each Bank
by section 6(b) of the Act, as amended (12 U.S.C. 1426(b)), and part 933
of this chapter, as approved by the Finance Board, unless the context of
the regulation refers to the capital plan prior to its approval by the
Finance Board.
CIP means the Community Investment Program, an advance program under
CICA required to be offered pursuant to section 10(i) of the Act (12
U.S.C. 1430(i)).
Community Investment Cash Advance or CICA means any advance made
through a program offered by a Bank under section 10 of the Act (12
U.S.C. 1430) and parts 951 and 952 of this chapter to provide funding
for targeted community lending and affordable housing, including
advances made under a Bank's Rural Development Funding (RDF) program,
offered under section 10(j)(10) of the Act (12 U.S.C. 1430(j)(10)); a
Bank's Urban Development Funding (UDF) program, offered under section
10(j)(10) of the Act (12 U.S.C. 1430(j)(10)); a Bank's Affordable
Housing Program (AHP), offered under section 10(j) of the Act (12 U.S.C.
1430(j)); a Bank's Community Investment Program (CIP), offered under
section 10(i) of the Act (12 U.S.C. 1430(i)); or any other program
offered by a Bank that meets the requirements of part 952 of this
chapter.
Community lending means providing financing for economic development
projects for targeted beneficiaries, and, for community financial
institutions (as defined in Sec. 925.1 of this chapter), purchasing or
funding small business loans, small farm loans or small agri-business
loans (as defined in Sec. 950.1 of this chapter).
Consolidated obligation or CO means any bond, debenture, or note
authorized under part 966 of this chapter to be issued jointly by the
Banks pursuant to section 11(a) of the Act, as amended (12 U.S.C.
1431(a)), or any bond or note issued by the Finance Board on behalf of
all Banks pursuant to section 11(c) of the Act (12 U.S.C. 1431(c)), on
which the Banks are jointly and severally liable.
Financial Management Policy or FMP means the Financial Management
Policy For The Federal Home Loan Bank System approved by the Finance
Board pursuant to Finance Board Resolution No. 96-45 (July 3, 1996), as
amended by Finance Board Resolution No. 96-90 (Dec. 6, 1996), Finance
Board Resolution No. 97-05 (Jan. 14, 1997), and Finance Board Resolution
No. 97-86 (Dec. 17, 1997).
Sec. 900.3 Terms relating to other entities and concepts used throughout
12 CFR chapter IX.
As used throughout this chapter, the following terms relating to
other entities and concepts used throughout 12 CFR chapter IX have the
meanings set forth below, unless otherwise indicated in a particular
subchapter, part, section or paragraph:
Appropriate Federal banking agency has the meaning set forth in
section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q))
and, for federally-insured credit unions, means the NCUA.
Appropriate state regulator means any state officer, agency,
supervisor or other entity that has regulatory authority over, or is
empowered to institute enforcement action against, a particular
institution.
Fannie Mae means the Federal National Mortgage Association
established under authority of the Federal National Mortgage Association
Charter Act (12 U.S.C. 1716, et seq.).
FDIC means the Federal Deposit Insurance Corporation.
FRB means the Board of Governors of the Federal Reserve System.
Freddie Mac means the Federal Home Loan Mortgage Corporation
established under authority of the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1451, et seq.).
Generally Accepted Accounting Principles or GAAP means accounting
principles generally accepted in the United States.
Ginnie Mae means the Government National Mortgage Association
established under authority of the Federal National Mortgage Association
Charter Act (12 U.S.C. 1716, et seq.).
GLB Act means the Gramm-Leach-Bliley Act (Pub. L. 106-102 (1999)).
[[Page 9]]
HUD means the United States Department of Housing and Urban
Development.
NCUA means the National Credit Union Administration.
NRSRO means a credit rating organization regarded as a Nationally
Recognized Statistical Rating Organization by the Securities and
Exchange Commission.
OCC means the Office of the Comptroller of the Currency.
OTS means the Office of Thrift Supervision.
SBIC means a small business investment company formed pursuant to
section 301 of the Small Business Investment Act (15 U.S.C. 681).
SEC means the United States Securities and Exchange Commission.
State means a state of the United States, American Samoa, the
Commonwealth of the Northern Mariana Islands, the District of Columbia,
Guam, Puerto Rico, or the United States Virgin Islands.
1934 Act means the Securities Exchange Act of 1934 (15 U.S.C. 78a et
seq.).
[67 FR 12842, Mar. 20, 2002, as amended at 69 FR 38811, June 29, 2004]
[[Page 10]]
SUBCHAPTER B_FEDERAL HOUSING FINANCE BOARD ORGANIZATION AND OPERATIONS
PART 905_DESCRIPTION OF ORGANIZATION AND FUNCTIONS--Table of Contents
Subpart A_Functions and Responsibilities of Finance Board
Sec.
905.1 [Reserved]
905.2 General statement and statutory authority.
905.3 Location and business hours.
905.4 Duties of the Finance Board.
Appendix A to Subpart A of Part 905--Federal Home Loan Banks
Subpart B_General Organization
905.10 Board of Directors.
905.11 Office of Inspector General.
905.12 Office of Management.
905.13 Office of Supervision.
905.14 Office of General Counsel.
Subpart C_Miscellaneous
905.25 Forms.
905.26 Official logo and seal.
Authority: 5 U.S.C. 552; 12 U.S.C. 1422b(a), 1423.
Source: 56 FR 67155, Dec. 30, 1991, unless otherwise noted.
Redesignated at 65 FR 8256, Feb. 18, 2000.
Subpart A_Functions and Responsibilities of Finance Board
Sec. 905.1 [Reserved]
Sec. 905.2 General statement and statutory authority.
(a) The Finance Board is an independent, executive agency in the
Federal Government, responsible for regulating the Bank System. It is
funded through assessments levied upon the Banks. These funds are not
considered Government Funds or appropriated monies. The Finance Board is
governed by a five-member Board of Directors and administered by a full-
time staff.
(b) The members of the Board of Directors individually are referred
to as Directors. Other than the Office of Inspector General and the
Office of General Counsel, the heads of the administrative units, called
offices, also are called Directors. The head of the Office of Inspector
General is called the Inspector General and the head of the Office of
General Counsel is called the General Counsel.
(c) The Finance Board administers the Act and is authorized to issue
rules, regulations and orders affecting the Bank System. The Finance
Board performs all such duties and responsibilities as may be required
by statute. As required by section 302(b)(2) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1717(b)), it also conducts a
monthly survey of all major lenders to calculate a national average for
interest rates on mortgages for one-family homes, on behalf of the
Fannie Mae. As required by section 305(b) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1454(b)), it conducts a similar
survey for the Freddie Mac.
[56 FR 67155, Dec. 30, 1991, as amended at 65 FR 8256, Feb. 18, 2000; 67
FR 12843, Mar. 20, 2002; 68 FR 38169, June 27, 2003]
Sec. 905.3 Location and business hours.
(a) Location. All office units of the Finance Board are located at
1777 F Street, NW., Washington, DC 20006.
(b) Hours of operation. The regular hours of operation of the
Finance Board are from 8:30 a.m. to 5:30 p.m., Monday through Friday.
Sec. 905.4 Duties of the Finance Board.
(a) Bank System. The Finance Board supervises and regulates the
Banks and the Office of Finance. Specifically, its duties are:
(1) To ensure that the Banks operate in a safe and sound manner;
(2) To supervise all business operations of the Banks, which may
include:
(i) Prescribing conditions upon which Banks may advance funds to
their members and housing associates;
(ii) Prescribing rules and conditions under which a Bank may borrow
funds, pay interest on those funds, or issue obligations;
(iii) Requiring examinations of the Banks; and
[[Page 11]]
(iv) Appointing the public interest members of the boards of
directors of the Banks;
(3) To ensure that the Banks fulfill their housing finance and
community lending mission;
(4) To ensure that the Banks remain adequately capitalized; and
(5) To ensure that the Banks are able to raise funds in the capital
markets.
(b) Financing Corporation. The Finance Board also oversees the
operations of the Financing Corporation, including its issuance of
obligations.
[67 FR 12843, Mar. 20, 2002]
Appendix A to Subpart A of Part 905--Federal Home Loan Banks
Federal Home Loan Bank District 1
(Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island,
Vermont)
Federal Home Loan Bank of Boston
111 Huntington Avenue, 24th Floor, Boston, MA 02199-7614
Federal Home Loan Bank District 2
(New Jersey, New York, Puerto Rico, Virgin Islands)
Federal Home Loan Bank of New York
101 Park Avenue, New York, NY 10178-0599
Federal Home Loan Bank District 3
(Delaware, Pennsylvania, West Virginia)
Federal Home Loan Bank of Pittsburgh
601 Grant Street, Pittsburgh, PA 15219-4455
Federal Home Loan Bank District 4
(Alabama, District of Columbia, Florida, Georgia, Maryland, North
Carolina, South Carolina, Virginia)
Federal Home Loan Bank of Atlanta
1475 Peachtree Street, NE., Atlanta, GA 30309
Federal Home Loan Bank District 5
(Kentucky, Ohio, Tennessee)
Federal Home Loan Bank of Cincinnati
221 East Fourth Street, Suite 1000, Cincinnati, OH 45202
Federal Home Loan Bank District 6
(Indiana, Michigan)
Federal Home Loan Bank of Indianapolis
8250 Woodfield Crossing Boulevard, Indianapolis, IN 46240
Federal Home Loan Bank District 7
(Illinois, Wisconsin)
Federal Home Loan Bank of Chicago
111 East Wacker Drive, Suite 700, Chicago, IL 60601
Federal Home Loan Bank District 8
(Iowa, Minnesota, Missouri, North Dakota, South Dakota)
Federal Home Loan Bank of Des Moines
907 Walnut Street, Des Moines, IA 50309
Federal Home Loan Bank District 9
(Arkansas, Louisiana, Mississippi, New Mexico, Texas)
Federal Home Loan Bank of Dallas
8500 Freeport Parkway South, Suite 100, Irving, TX 75063-2547
Federal Home Loan Bank District 10
(Colorado, Kansas, Nebraska, Oklahoma)
Federal Home Loan Bank of Topeka
One Security Benefit Place, Suite 100, Topeka, KS 66606-2444
Federal Home Loan Bank District 11
(Arizona, California, Nevada)
Federal Home Loan Bank of San Francisco
600 California Street, San Francisco, CA 94108
Federal Home Loan Bank District 12
(Alaska, American Samoa, the Commonwealth of the Northern Mariana
Islands, Guam, Hawaii, Idaho, Montana, Oregon, Utah, Washington,
Wyoming)
Federal Home Loan Bank of Seattle
1501 Fourth Avenue, 19th Floor, Seattle, WA 98101-1693
[56 FR 67155, Dec. 30, 1991, as amended at 63 FR 3455, Jan. 23, 1998; 67
FR 12843, Mar. 20, 2002; 68 FR 38170, June 27, 2003]
Subpart B_General Organization
Source: 68 FR 38170, June 27, 2003, unless otherwise noted.
Sec. 905.10 Board of Directors.
(a) Board of Directors--(1) General. The Bank Act vests management
of the Finance Board in a five-member Board of Directors consisting of
four members appointed by the President with the advice and consent of
the Senate to
[[Page 12]]
serve staggered seven-year terms, and one ex-officio member, the
Secretary of the U.S. Department of Housing and Urban Development. The
four appointed directors must have backgrounds in housing finance or a
demonstrated commitment to providing specialized housing credit and at
least one appointed director must have a background with an organization
with a two-year record of representing consumer or community interests
on either banking services, credit needs, housing or financial consumer
protections. Not more than three of the five directors may belong to the
same political party.
(2) Responsibilities. The Board of Directors is responsible for
setting agency policy and issuing resolutions, rules, regulations,
orders and policies as necessary.
(b) Chairperson--(1) General. The President designates an appointed
director as chairperson of the Board of Directors.
(2) Responsibilities. The responsibilities of the chairperson
include:
(i) Presiding over the meetings of the Board of Directors;
(ii) Effecting the overall management, functioning and organization
of the Finance Board;
(iii) Ensuring effective coordination and communication with the
Congress and interest groups on legislative issues pertaining to the
Finance Board, the Bank System, and the Financing Corporation; and
(iv) Disseminating information about the Finance Board to other
government agencies, the public and the news media.
Sec. 905.11 Office of Inspector General.
(a) General. The Inspector General reports directly to the
chairperson of the Board of Directors and is subject to, and operates
under, the provisions of the Inspector General Act of 1978, as amended
(5 U.S.C. app. 3).
(b) Responsibilities. The responsibilities of the Office of
Inspector General under the Inspector General Act include:
(1) Conducting and supervising audits and investigations relating to
the programs and operations of the Finance Board;
(2) Providing leadership and coordination, and recommending policies
for Finance Board activities designed to promote the economy, efficiency
and effectiveness of programs and operations, and preventing and
detecting fraud and abuse in programs and operations; and
(3) Providing a means for keeping the Board of Directors, agency
managers and the Congress fully and currently informed regarding on-
going investigations and, if needed, the necessity for and progress of
corrective action.
Sec. 905.12 Office of Management.
(a) General. The Office of Management is the principal advisor to
the chairperson and the Board of Directors on management and
organizational policies and is responsible for the Finance Board's
administrative management programs.
(b) Responsibilities. The responsibilities of the Office of
Management include:
(1) Developing and managing agency policies and procedures governing
employment and personnel action requirements, compensation and agency
payroll requirements, travel, awards, insurance, retirement benefits and
other employee benefits;
(2) Facilities and property management and supply requirements;
(3) Procurement and contracting programs;
(4) Agency financial management, budgeting and accounting;
(5) Records management; and
(6) Coordinating the design, programming, operation and maintenance
of the Finance Board's technology and information systems.
Sec. 905.13 Office of Supervision.
(a) General. The Office of Supervision is responsible for conducting
on-site examinations of the twelve Federal Home Loan Banks and the
Office of Finance and conducting off-site monitoring and analysis. The
Office of Supervision also is responsible for providing expert policy
advice and analyzing and reporting on economic, housing finance,
community investment and competitive environments in which the Bank
System and its members operate.
[[Page 13]]
(b) Responsibilities. The responsibilities of the Office of
Supervision include:
(1) Conducting examinations, at least annually, of the Banks, the
Office of Finance and the Financing Corporation and resolving
outstanding examination issues;
(2) Monitoring Bank and Bank System market, credit and operational
risks;
(3) Analyzing the financial performance of the Banks;
(4) Preparing the Monthly Survey of Rates and Terms of Conventional
One-Family Nonfarm Mortgage Loans (MIRS) and determining the conforming
loan limit for Federal National Mortgage Association (Fannie Mae) and
Federal Home Loan Mortgage Corporation (Freddie Mac) purchases and
guarantees;
(5) Analyzing the Banks' performance and policy issues arising under
the Affordable Housing Program and the Community Investment Program; and
(6) Collecting and analyzing data on the housing and community and
economic development activities of the Banks.
Sec. 905.14 Office of General Counsel.
(a) General. The General Counsel is the chief legal officer of the
Finance Board and is responsible for advising the Board of Directors,
the chairperson and other Finance Board officials on interpretations of
law, regulation and policy.
(b) Responsibilities. The responsibilities of the Office of General
Counsel include:
(1) Preparing all legal documents on behalf of the Finance Board
such as opinions, regulations and memoranda of law;
(2) Representing the Finance Board in all administrative
adjudicatory proceedings before the Board of Directors and in all other
administrative matters involving the agency;
(3) Representing the Finance Board in judicial proceedings involving
the agency's supervisory or regulatory authority over the Federal Home
Loan Banks;
(4) Administering the Finance Board's Ethics, Freedom of Information
Act, Privacy Act, Paperwork Reduction Act, and Government in the
Sunshine Act programs; and
(5) Secretary to the Board functions.
Subpart C_Miscellaneous
Sec. 905.25 Forms.
The following forms are available at the Finance Board headquarters
facility and shall be used for the purpose indicated:
Form
10-91--Monthly Survey of Rates and Terms on Conventional 1 Family
Nonfarm Mortgage Loans.
9102--Certificate of Nomination, Election of Federal Home Loan Bank
Directors.
9103--Election Ballot, Election of Federal Home Loan Bank Directors.
A-1--Appointive Director Candidates--Personal Certification and
Disclosure Form.
E-1--Elective Director Nominees--Personal Certification and Disclosure
Form.
90-T04--Local Travel Claim.
[60 FR 49199, Sept. 22, 1995, as amended at 63 FR 65687, Nov. 30, 1998;
65 FR 8257, Feb. 18, 2000. Redesignated and amended at 67 FR 12843, Mar.
20, 2002]
Sec. 905.26 Official logo and seal.
This section describes and displays the logo adopted by the Board of
Directors as the official symbol representing the Finance Board. It is
displayed on correspondence and selected documents. This logo also
serves as the official seal used to certify and authenticate official
documents of the Board of Directors.
(a) Description. The logo is a disc with its center consisting of
three polygons arranged in an irregular line partially overlapping--each
polygon drawn in a manner resembling a silhouette of a pitched roof
house and with distinctive eaves under its roof--encircled by a
designation scroll having an outer and inner border of plain heavy lines
and containing the words ``FEDERAL HOUSING FINANCE BOARD'' in capital
letters with serifs, with two mullets on the extreme left and right of
the scroll.
(b) Display. The Finance Board's official seal and logo appears
below:
[[Page 14]]
[GRAPHIC] [TIFF OMITTED] TR20MR02.004
[67 FR 12843, Mar. 20, 2002]
PART 906_OPERATIONS--Table of Contents
Sec.
906.1 Definitions.
906.2 Assessments on the Banks.
906.3 Monthly interest rate survey.
906.5 Minority Contractors Outreach Program.
Authority: 12 U.S.C. 1422b and 1438(b).
Source: 58 FR 19195, Apr. 13, 1993, unless otherwise noted.
Redesignated at 65 FR 8256, Feb. 18, 2000.
Sec. 906.1 Definitions.
As used in this part:
Business means an enterprise, including a firm, corporation, joint
stock company, partnership, joint venture or association that engages in
commercial activity on a regular basis.
Minority means:
(1) A male person or persons classified as either an African-
American, a Native-American, a Hispanic-American, or an Asian-American;
or
(2) A female person or persons regardless of ethnic or racial
classification.
Minority-owned entity means a business that is:
(1) Owned or controlled by any combination of African-Americans,
Native-Americans, Hispanic-Americans or Asian-Americans, regardless of
gender, where such ownership or control includes the management of the
daily business operations; or
(2) Owned or controlled by female persons, regardless of ethnic
origin, where such ownership or control includes the management of its
daily business operations.
[58 FR 19195, Apr. 13, 1993, as amended at 65 FR 8257, Feb. 18, 2000; 67
FR 12844, Mar. 20, 2002]
Sec. 906.2 Assessments on the Banks.
(a) Assessment authority. The Finance Board may impose a semiannual
assessment on the Banks in an aggregate amount the Finance Board
determines is sufficient to provide for the payment of its estimated
expenses for the period for which it makes such assessment.
(b) Assessment procedure. (1) At or near the end of each fiscal
year, the Finance Board shall approve an annual budget of Finance Board
expenses for the next fiscal year. The Finance Board shall promptly
provide a copy of the approved budget to each Bank president.
(2) The Finance Board shall assess the Banks semiannually in an
aggregate amount it determines is sufficient to pay the expenses
approved under paragraph (b)(1) of this section. The Finance Board shall
offset the amount of the semiannual assessments it imposes on the Banks
by any amount it determines is remaining from previous semiannual
assessments. The Finance Board shall promptly notify each Bank president
in writing of the amount on any assessment.
(3) Each Bank shall pay a pro rata share of the semiannual
assessments imposed under paragraph (b)(2) of this section. The Finance
Board shall calculate each Bank's pro rata share based on the ratio
between the total paid-in value of the Bank's capital stock and the
aggregate total paid-in value of the capital stock of every Bank. The
Finance Board shall promptly notify each Bank in writing of the amount
of its pro rata share of any semiannual assessment.
(4) Unless otherwise instructed in writing by the Finance Board,
each Bank shall pay to the Finance Board its pro rata share of an
assessment in equal monthly installments during the semiannual period
covered by the assessment.
[62 FR 35949, July 3, 1997, as amended at 67 FR 12844, Mar. 20, 2002]
[[Page 15]]
Sec. 906.3 Monthly interest rate survey.
The Finance Board conducts its Monthly Survey of Rates and Terms on
Conventional One-Family Non-farm Mortgage Loans in the following manner:
(a) Initial survey. Each month, the Finance Board samples savings
institutions, commercial banks, and mortgage loan companies, and asks
them to report the terms and conditions on all conventional mortgages
(i.e., those not federally insured or guaranteed) used to purchase
single-family homes that each such lender closes during the last five
working days of the month. In most cases, the information is reported
electronically in a format similar to Finance Board Form FHFB 10-91. The
initial weights are based on lender type and lender size. The data also
is weighted so that the pattern of weighted responses matches the actual
pattern of mortgage originations by lender type and by region. The
Finance Board tabulates the data and publishes standard data tables late
in the following month.
(b) Adjustable-rate mortgage index. The weighted data, tabulated and
published pursuant to paragraph (a) of this section, is used to compile
the Finance Board's adjustable-rate mortgage index, entitled the
``National Average Contract Mortgage Rate for the Purchase of Previously
Occupied Homes by Combined Lenders.'' This index is the successor to the
index maintained by the former Federal Home Loan Bank Board and is used
for determining the movement of the interest rate on renegotiable-rate
mortgages and on some other adjustable-rate mortgages.
[67 FR 78961, Dec. 27, 2002]
Sec. 906.5 Minority Contractors Outreach Program.
(a) Scope. (1) This section establishes the Finance Board's Minority
Contractors Outreach Program and designates the officials responsible
for implementing the Program and its oversight.
(2) The Minority Contractor Outreach Program:
(i) Seeks to encourage the maximum participation of minorities in
all Finance Board procurement contracts for goods or services;
(ii) Shall operate consistent with the principle of full and open
competition and the concept of contracting for minimum agency needs at
the lowest practical cost; and
(iii) Shall not be construed to be a substitute means of procurement
for the Finance Board's established procedural process for the
procurement of goods or services.
(b) Responsibilities. (1) The Director of the Office of Resource
Management shall have general oversight of the Minority Contractors
Outreach Program.
(2) The Chairperson shall:
(i) Appoint an Minority Contractors Advocate, who shall--
(A) Have primary responsibility for furthering the purposes of the
Minority Contractors Outreach Program;
(B) Be responsible for challenging barriers to, and promoting
maximum participation by, minorities or minority-owned entities in the
Finance Board procurement process; and
(C) Develop a manual describing the procedures by which the Finance
Board will implement the Minority Contractors Outreach Program.
(ii) Assign such Advocate only such duties or responsibilities, with
respect to the Minority Contractors Outreach Program, as are consistent
with this section, and shall not assign such Advocate any duties of a
contracting officer or of a technical representative on a contract.
(c) Program components. The Minority Contractors Outreach Program
procedures shall include the following:
(1) Contractor File. (i) The Minority Contractors Advocate shall
compile and maintain an ongoing file consisting of minority-owned
entities that are interested in contracting with the Finance Board for
goods or services through the competitive bidding or negotiated
procurement process.
(ii) The information in such file shall list the current name and
address of each such minority-owned entity and shall categorize each
name and address as follows:
(A) Accounting services;
(B) Building support services;
(C) Computer services;
(D) Consulting services;
[[Page 16]]
(E) Legal services;
(F) Office supplies and equipment; or
(G) Other services.
(2) Solicitation. The Minority Contractors Advocate shall implement
a procedure for soliciting potential candidates for the contractor file
provided for in paragraph (c)(1) of this section, by means of any of the
following:
(i) Referrals from executive departments, agencies or
instrumentalities of the Federal Government;
(ii) Direct solicitation of selected candidates;
(iii) Advertising by direct mail or publications specifically
directed to minorities, or minority-owned entities;
(iv) Sponsoring Finance Board seminars designed to explain the
Minority Contractors Outreach Program to minority contractors or
minority-owned entities who have the potential of contracting with the
Finance Board; or
(v) Attendance at conventions, seminars or other professional
conferences of minorities or minority-owned entities located in the
greater Washington metropolitan area.
(3) Certification. (i) No minority-owned entity (whether solicited
by the Minority Contractors Advocate or not) may participate in the
Finance Board procurement process as a minority-owned entity unless
certified as such by the Chairperson, or designee.
(ii) The certification shall be by a means and form approved by the
Finance Board.
(iii) Nothing in this section shall be deemed to prevent an non-
certified minority-owned entity from participating in the procurement
process as an entity not designated or deemed a minority or minority-
owned entity.
(4) Promotion. (i) The Minority Contractors Advocate shall maintain
an ongoing campaign of promotion of the Minority Contractors Outreach
Program with all certified minority-owned entities.
(ii) This campaign shall include:
(A) Ongoing dissemination of information about the Minority
Contractors Outreach Program with certified minority-owned entities;
(B) Alerting appropriate certified minority-owned entities when the
Finance Board makes a solicitation for a bid or initiates the
negotiation of a procurement contract for goods or services;
(C) Acting as a liaison between the Finance Board contracting
authorities and a particular minority-owned entity; and
(D) Assisting any certified minority-owned entity to understand
Finance Board contracting procedures or other information regarding a
particular bid or contract.
(iii) Nothing in this paragraph (c)(4) shall authorize the Minority
Contractors Advocate to represent the interests of any minority-owned
entity in any contract matter or bid before the Finance Board.
(5) Contract award guidelines--(i) Contracts not exceeding $25,000.
The Finance Board Contracting Officer shall, from time to time, award
contracts for the procurement of goods or services, that do not exceed
$25,000 in costs, to certified minority-owned entities listed in the
contractor file provided for in paragraph (c)(1) of this section, to the
extent not inconsistent with the principles of Federal Government
procurement laws. Such awards shall be made after consultation with the
Minority Contractors Advocate.
(ii) Contracts exceeding $25,000. Contracts for goods or services
that exceed $25,000 will be awarded on the basis and consistent with the
principles of the Federal Government procurement laws. The Finance Board
Contracting Officer and the Minority Contractors Advocate shall work to
ensure, promote and facilitate the maximum participation of minority-
owned entities in the Finance Board's procurement of goods or services
that exceed $25,000.
[58 FR 19195, Apr. 13, 1993. Redesignated at 65 FR 8256, Feb. 18, 2000,
as amended at 67 FR 12844, Mar. 20, 2002]
PART 907_PROCEDURES--Table of Contents
Subpart A_Definitions
Sec.
907.1 Definitions.
Subpart B_Waivers, Approvals, No-Action Letters, and Regulatory
Interpretations
907.2 Waivers.
907.3 Approvals.
907.4 No-Action Letters.
[[Page 17]]
907.5 Regulatory Interpretations.
907.6 Submission requirements.
907.7 Issuance of Waivers, Approvals, No-Action Letters, and Regulatory
Interpretations.
Subpart C_Case-by-Case Determinations; Review of Disputed Supervisory
Determinations
907.8 Case-by-Case Determinations.
907.9 Review of Disputed Supervisory Determinations.
907.10 Petitions.
907.11 Requests to Intervene.
907.12 Finance Board procedures.
907.13 Consideration and Final Decisions.
907.14 Meetings of the Board of Directors to consider Petitions.
907.15 General provisions.
907.16 Rules of practice.
Authority: 12 U.S.C. 1422b(a)(1).
Source: 64 FR 30883, June 9, 1999, unless otherwise noted.
Redesignated at 65 FR 8256, Feb. 18, 2000.
Editorial Note: Nomenclature changes to part 907 appear at 67 FR
12844, Mar. 20, 2002.
Subpart A_Definitions
Sec. 907.1 Definitions.
As used in this part:
Approval means a written statement issued to a Bank or the Office of
Finance approving a transaction, activity, or item that requires Finance
Board approval under the Act or a Finance Board rule, regulation,
policy, or order.
Case-by-Case Determination means a Final Decision concerning any
matter that requires a determination, finding, or approval by the Board
of Directors under the Act or Finance Board regulations, for which no
controlling statutory, regulatory, or other Finance Board standard
previously has been established, and that, in the judgment of the Board
of Directors, is best resolved on a case-by-case basis by a ruling
applicable only to the Petitioner and any Intervenor, and not by
adoption of a rule of general applicability.
Final Decision means a decision rendered by the Board of Directors
on issues raised in a Petition or Request to Intervene that have been
accepted for consideration.
Intervenor means a Bank, Member, or other entity that has been
granted leave to intervene in the consideration of a Petition by the
Board of Directors.
Managing Director means the Managing Director of the Finance Board.
No-Action Letter means a written statement issued to a Bank or the
Office of Finance providing that Finance Board staff will not recommend
supervisory or other action to the Board of Directors for failure to
comply with a specific provision of the Act or a Finance Board rule,
regulation, policy, or order, if a requester undertakes a proposed
transaction or activity.
Party means a Petitioner, an Intervenor, or the Finance Board.
Petition means a Petition for Case-by-Case Determination or a
Petition for Review of a Disputed Supervisory Determination.
Petitioner means the Office of Finance or a Bank that has filed a
Petition.
Regulatory Interpretation means written guidance issued by Finance
Board staff with respect to application of the Act or a Finance Board
rule, regulation, policy, or order to a proposed transaction or
activity.
Requester means an entity or person that has submitted an
application for a Waiver or Approval or a request for a No-Action Letter
or Regulatory Interpretation.
Supervisory determination means a Finance Board finding in a report
of examination, order, or directive, or a Finance Board order or
directive concerning safety and soundness or compliance matters that
requires mandatory action by a Bank or the Office of Finance.
Waiver means a written statement issued to a Bank, a Member, or the
Office of Finance that waives a provision, restriction, or requirement
of a Finance Board rule, regulation, policy, or order, or a required
submission of information, not otherwise required by law, in connection
with a particular transaction or activity.
[64 FR 30883, June 9, 1999, as amended at 65 FR 8257, Feb. 18, 2000; 67
FR 12844, Mar. 20, 2002]
[[Page 18]]
Subpart B_Waivers, Approvals, No-Action Letters, and Regulatory
Interpretations
Sec. 907.2 Waivers.
(a) Authority. The Board of Directors reserves the right, in its
discretion and in connection with a particular transaction or activity,
to waive any provision, restriction, or requirement of this chapter, or
any required submission of information, not otherwise required by law,
if such waiver is not inconsistent with the law and does not adversely
affect any substantial existing rights, upon a determination that
application of the provision, restriction, or requirement would
adversely affect achievement of the purposes of the Act, or upon a
showing of good cause.
(b) Application. A Bank, a Member, or the Office of Finance may
apply for a Waiver in accordance with Sec. 907.6.
[64 FR 30883, June 9, 1999, as amended at 65 FR 8257, Feb. 18, 2000]
Sec. 907.3 Approvals.
(a) Application. A Bank or the Office of Finance may apply for an
Approval of any transaction, activity, or item that requires Finance
Board approval under the Act or a Finance Board rule, regulation,
policy, or order in accordance with Sec. 907.6, unless alternative
application procedures are prescribed by the Act or a Finance Board
rule, regulation, policy, or order for the transaction, activity, or
item at issue.
(b) Reservation. The Finance Board reserves the right, in its
discretion, to prescribe additional or alternative procedures for any
application for Approval of a transaction, activity, or item.
[64 FR 30883, June 9, 1999, as amended at 65 FR 8257, Feb. 18, 2000]
Sec. 907.4 No-Action Letters.
(a) Authority. Finance Board staff, in its discretion, may issue a
No-Action Letter to a Bank or the Office of Finance stating that staff
will not recommend supervisory or other action to the Board of Directors
for failure to comply with a specific provision of the Act or a Finance
Board rule, regulation, policy, or order, if a requester undertakes a
proposed transaction or activity. The Board of Directors may modify or
supersede a No-Action Letter.
(b) Requests. A Bank or the Office of Finance may request a No-
Action Letter in accordance with Sec. 907.6.
[64 FR 30883, June 9, 1999, as amended at 65 FR 8257, Feb. 18, 2000]
Sec. 907.5 Regulatory Interpretations.
(a) Authority. Finance Board staff, in its discretion, may issue a
Regulatory Interpretation to a Bank, a Member, an official of a Bank or
Member, the Office of Finance, or any other entity or person, providing
guidance with respect to application of the Act or a Finance Board rule,
regulation, policy, or order to a proposed transaction or activity. The
Board of Directors may modify or supersede a Regulatory Interpretation.
(b) Requests. A Bank, a Member, an official of a Bank or Member, the
Office of Finance, or any other entity or person may request a
Regulatory Interpretation in accordance with Sec. 907.6.
[64 FR 30883, June 9, 1999, as amended at 65 FR 8257, Feb. 18, 2000]
Sec. 907.6 Submission requirements.
Applications for a Waiver or Approval and requests for a No-Action
Letter or Regulatory Interpretation shall comply with the following
requirements:
(a) Filing. Each application or request shall be in writing. The
original and three copies shall be filed with the Secretary to the
Board, Federal Housing Finance Board, 1777 F Street NW., Washington, DC
20006.
(b) Authorization--(1) Waivers and Approvals. Applications for
Waivers and Approvals shall be signed by an official with authority to
sign such applications on behalf of the requester. Applications for
Waivers and Approvals from a Bank or the Office of Finance shall be
accompanied by a resolution of the board of directors of the Bank or the
Office of Finance concurring in the substance and authorizing the filing
of the application.
(2) Requests for No-Action Letters. The president of the Bank making
a Request for a No-Action Letter shall sign the Request. Requests for a
No-Action
[[Page 19]]
Letter from the Office of Finance shall be signed by the chairperson of
the board of directors of the Office of Finance.
(3) Requests for Regulatory Interpretations. The requester or an
authorized representative of the requester shall sign a request for a
Regulatory Interpretation.
(c) Information requirements. Each application or request shall
contain:
(1) The name of the requester, and the name, title, address,
telephone number, and electronic mail address, if any, of the official
filing the application or request on its behalf;
(2) The name, address, telephone number, and electronic mail
address, if any, of a contact person from whom Finance Board staff may
seek additional information if necessary;
(3) The section numbers of the particular provisions of the Act or
Finance Board rules, regulations, policies, or orders to which the
application or request relates;
(4) Identification of the determination or relief requested,
including any alternative relief requested if the primary relief is
denied, and a clear statement of why such relief is needed;
(5) A statement of the particular facts and circumstances giving
rise to the application or request and identifying all relevant legal
and factual issues;
(6) References to all relevant authorities, including the Act,
Finance Board rules, regulations, policies, and orders, judicial
decisions, administrative decisions, relevant statutory interpretations,
and policy statements;
(7) References to any Waivers, No-Action Letters, Approvals, or
Regulatory Interpretations issued to the requester in the past in
response to circumstances similar to those surrounding the request or
application;
(8) For any application or request involving interpretation of the
Act or Finance Board regulations, a reasoned opinion of counsel
supporting the relief or interpretation sought and distinguishing any
adverse authority;
(9) Any non-duplicative, relevant supporting documentation; and
(10) A certification by a person with knowledge of the facts that
the representations made in the application or request are accurate and
complete. The following form of certification is sufficient for this
purpose: ``I hereby certify that the statements contained in the
submission are true and complete to the best of my knowledge. [Name and
Title].''
(d) Waiver of requirements. The Managing Director may waive any
requirement of this section for good cause. The Managing Director shall
provide prompt notice of any such waiver to the Board of Directors. The
Board of Directors may overrule any waiver granted by the Managing
Director under this paragraph.
(e) Withdrawal. Once filed, an application or request may be
withdrawn only upon written request. The Finance Board will not consider
a request for withdrawal after transmission by the Secretary to the
Board to the requester of a response in final form.
[64 FR 30883, June 9, 1999, as amended at 65 FR 8257, Feb. 18, 2000; 67
FR 12844, Mar. 20, 2002]
Sec. 907.7 Issuance of Waivers, Approvals, No-Action Letters, and
Regulatory Interpretations.
(a) Board of Directors review. At least three business days prior to
issuance to the requester, the Secretary to the Board shall transmit
each Approval, No-Action Letter, or Regulatory Interpretation issued by
the Chairperson or Finance Board staff to the Board of Directors for
review.
(b) Issuance and effectiveness. A Waiver, Approval, No-Action
Letter, or Regulatory Interpretation is not effective until the
Secretary to the Board has transmitted it in final form to the
requester.
(c) Abbreviated form. The Finance Board may respond to an
application or request in an abbreviated form, consisting of a concise
statement of the nature of the response, without restatement of the
underlying facts.
[[Page 20]]
Subpart C_Case-by-Case Determinations; Review of Disputed Supervisory
Determinations
Sec. 907.8 Case-by-Case Determinations.
(a) Petition for Case-by-Case Determination. A Bank or the Office of
Finance may seek a Case-by-Case Determination concerning any matter that
may require a determination, finding or approval under the Act or
Finance Board regulations by the Board of Directors, and for which no
controlling statutory, regulatory or other Finance Board standard
previously has been established. The Office of Finance or a Bank seeking
a Case-by-Case Determination shall file a Petition for Case-by-Case
Determination in accordance with Sec. 907.10.
(b) Intervention. A Member, a Bank, or the Office of Finance may
file a Request to Intervene in the consideration of the Petition in
accordance with Sec. 907.11 if it believes its rights may be affected.
[64 FR 30883, June 9, 1999, as amended at 65 FR 8257, Feb. 18, 2000]
Sec. 907.9 Review of Disputed Supervisory Determinations.
(a) Petition for Review of a Disputed Supervisory Determination. A
Bank or the Office of Finance may seek review by the Board of Directors
of a Finance Board finding in a report of examination, order, or
directive, or a Finance Board order or directive concerning safety and
soundness or compliance matters requiring mandatory action by the Bank
or Office of Finance. The Office of Finance or a Bank seeking review of
a disputed Supervisory Determination shall file a Petition for Review of
a Disputed Supervisory Determination within 60 calendar days from the
date of the disputed Supervisory Determination in accordance with Sec.
907.10.
(b) No stay while Petition is pending. All Supervisory
Determinations directed to a Bank or the Office of Finance shall remain
in full force and effect while a Petition is pending. That a Petition is
pending shall not operate or be deemed to operate as a suspension of the
obligation of a Bank or the Office of Finance to take corrective action
as required by a Supervisory Determination, except as the Bank or the
Office of Finance may be otherwise directed by order of the Board of
Directors.
(c) Notice to affected entities. With the approval of the Managing
Director, a Petitioner may, pursuant to 12 CFR 951.12(d) or otherwise,
provide notice of the issuance of a Supervisory Determination or the
filing of a Petition for Review of a Disputed Supervisory Determination,
to another Bank, the Office of Finance, or a Member or other entity
named in 12 CFR 951.12(d), if the Petitioner believes the entity's
rights may be affected by the Supervisory Determination or the Petition.
(d) Intervention. A Bank, the Office of Finance, a Member, or other
entity named in 12 CFR 951.12(d) may file a Request to Intervene in the
consideration of a Petition in accordance with Sec. 907.11 if it
believes its rights may be adversely affected by a Final Decision on the
Petition.
[64 FR 30883, June 9, 1999, as amended at 65 FR 8257, Feb. 18, 2000]
Sec. 907.10 Petitions.
Each Petition brought pursuant to this subpart shall comply with the
following requirements:
(a) Filing. The Petition shall be in writing. The original and three
copies shall be filed with the Secretary to the Board, Federal Housing
Finance Board, 1777 F Street NW., Washington, DC 20006.
(b) Information requirements. Each Petition shall contain:
(1) The name of the Petitioner, and the name, title, address,
telephone number, and electronic mail address, if any, of the official
filing the Petition on its behalf;
(2) The name, address, telephone number, and electronic mail
address, if any, of a contact person from whom Finance Board staff may
seek additional information if necessary;
(3) The section numbers of the particular provisions of the Act or
Finance Board rules, regulations, policies, or orders to which the
Petition relates, and, if the Petition is for Review of a Disputed
Supervisory Determination, identification of the disputed Supervisory
Determination;
[[Page 21]]
(4) Identification of the determination or relief requested,
including any alternative relief requested if the primary relief is
denied, and a clear statement of why such relief is needed;
(5) A statement of the particular facts and circumstances giving
rise to the Petition and identifying all relevant legal and factual
issues;
(6) A summary of any steps taken to date by the Petitioner to
address or resolve the dispute or issue; or, in cases involving safety
and soundness or compliance issues, a summary of any actions taken by
the Petitioner in the interim to implement corrective action;
(7) The Petitioner's argument in support of its position, including
citation to any supporting legal opinions, policy statements, or other
relevant precedent and supporting documentation, if any;
(8) References to all relevant authorities, including the Act,
Finance Board rules, regulations, policies, and orders, judicial
decisions, administrative decisions, relevant statutory interpretations,
and policy statements;
(9) A reasoned opinion of counsel supporting the relief or
interpretation sought and distinguishing any adverse authority;
(10) Any non-duplicative, relevant supporting documentation; and
(11) A certification by a person with knowledge of the facts that
the representations made in the Petition are accurate and complete. The
following form of certification is sufficient for this purpose: ``I
hereby certify that the statements contained in the Petition are true
and complete to the best of my knowledge. [Name and Title].''
(c) Authorization. Each Petition shall be accompanied by a
resolution of the Petitioner's board of directors concurring in the
substance and authorizing the filing of the Petition.
(d) Request to Appear. The Petition may contain a request that staff
or an agent of the Petitioner be permitted to make a personal appearance
before the Board of Directors at any meeting convened to consider the
Petition pursuant to these procedures. A statement of the reasons a
written presentation would not suffice shall accompany a Request to
Appear. The statement shall specifically:
(1) Identify any questions of fact that are in dispute;
(2) Summarize the evidence that would be presented at the meeting;
and
(3) Identify any proposed witnesses, and state the substance of
their anticipated testimony.
[64 FR 30883, June 9, 1999, as amended at 65 FR 8257, Feb. 18, 2000]
Sec. 907.11 Requests to Intervene.
(a) Filing--(1) Date. Any Request to Intervene in consideration of a
Petition under this subpart shall be in writing and shall be filed with
the Secretary to the Board within 45 days from the date the Petition is
filed.
(2) Information requirements. A Request to Intervene shall include
the information required by Sec. 907.10(b), where applicable, and a
concise statement of the position and interest of the Intervenor and the
grounds for the proposed intervention.
(3) Authorization. If the entity requesting intervention is a Bank
or the Office of Finance, the Request to Intervene shall be accompanied
by a resolution of the Petitioner's board of directors concurring in the
substance and authorizing the filing of the Request. If the entity
requesting intervention is not a Bank or the Office of Finance, the
Request to Intervene shall be signed by an official of the entity with
authority to authorize the filing of the Request, and shall include a
statement describing such authority.
(4) Request to Appear. A Request to Intervene may include a Request
to Appear before the Board of Directors in any meeting conducted under
these procedures to consider a Petition. A Request to Appear shall be
accompanied by a statement containing the information required by Sec.
907.10(d), and, in addition, setting forth the likely impact that
intervention will have on the expeditious progress of the meeting. A
Request to Appear shall be filed with the Secretary to the Board either
with the Request to Intervene or at least 20 days prior to the meeting
scheduled to consider the Petition.
(5) Intervenor is bound. Any Request to Intervene shall include a
statement that, if such leave to intervene is granted, the Intervenor
shall be bound expressly by the Final Decision of the
[[Page 22]]
Board of Directors, as described in Sec. 907.13(b), subject only to
judicial review or as otherwise provided by law.
(b) Grounds for approval. The Managing Director may grant leave to
intervene if the entity requesting intervention has complied with
paragraph (a) of this section and, in the judgment of Managing Director:
(1) The presence of the entity requesting intervention would not
unduly prolong or otherwise prejudice the adjudication of the rights of
the original parties; and
(2) The entity requesting intervention may be adversely affected by
a Final Decision on the Petition.
[64 FR 30883, June 9, 1999, as amended at 65 FR 8257, Feb. 18, 2000]
Sec. 907.12 Finance Board procedures.
(a) Notice of Receipt of Petition or Request to Intervene. No later
than three business days following receipt of a Petition or Request to
Intervene, the Secretary to the Board shall transmit a written Notice of
Receipt to the Petitioner or Intervenor. In the case of a Petition for
Case-by-Case Determination, the Finance Board shall promptly publish a
notice of receipt of Petition, including a brief summary of the issue(s)
involved, in the Federal Register.
(b) Transmittal of filings. The Secretary to the Board shall
promptly transmit copies of any Petition, Request to Intervene, or other
filing under this subpart to the Board of Directors and all other
parties to the filing.
(c) Opportunity to cure defects. The Managing Director shall afford
the Petitioner or Intervenor a reasonable opportunity to cure any
failure to comply with the requirements of Sec. 907.10.
(d) Information request. The Managing Director may request
additional information from the Petitioner or Intervenor. No later than
20 calendar days after the date of a request under this paragraph, the
Petitioner shall provide to the Secretary to the Board all information
requested.
(e) Supplemental information. Upon good cause shown, the Managing
Director may grant permission to a Petitioner or Intervenor to submit
supplemental written information pertaining to the Petition or Request
to Intervene.
(f) Consolidation and severance--(1) Consolidation. The Managing
Director may consolidate any or all matters at issue in two or more
meetings on Petitions where:
(i) There exist common parties or common questions of fact or law;
(ii) Consolidation would expedite and simplify consideration of the
issues; and
(iii) Consolidation would not adversely affect the rights of parties
engaged in otherwise separate proceedings.
(2) Severance. The Managing Director may order any meetings and
issues severed with respect to any or all parties or issues.
(g) Notice of Board Consideration. Within 30 calendar days of
receipt of a Petition deemed by the Managing Director to be in
compliance with the requirements of Sec. 907.10, or, if the Petition
has been the subject of a request under paragraph (d) of this section,
within 30 calendar days of receipt of a response from the Petitioner
deemed by the Managing Director to complete the information necessary
for the Board of Directors to consider the Petition, the Managing
Director, after consultation with the Board of Directors, through the
Secretary to the Board, shall provide all parties with a Notice of Board
Consideration containing the following information:
(1) Identification of the issues accepted for consideration;
(2) Any decision to consolidate or sever pursuant to paragraph (f)
of this section;
(3) Whether the Petition will be considered by the Board of
Directors on the written record pursuant to Sec. 907.13(a)(1), or at a
meeting pursuant to Sec. 907.13(a)(2); and
(4) If the Petition will be considered by the Board of Directors at
a meeting:
(i) The date, time and place of the meeting; and
(ii) A decision as to any Request to Appear filed pursuant to
Sec. Sec. 907.10(d) or 907.11(a)(4).
[64 FR 30883, June 9, 1999, as amended at 65 FR 8257, Feb. 18, 2000]
[[Page 23]]
Sec. 907.13 Consideration and Final Decisions.
(a) Consideration by Board of Directors. The Board of Directors may
consider a Petition and render a decision:
(1) Solely on the basis of the written record; or
(2) At a regularly scheduled meeting or a meeting convened
specifically for the purpose of considering the Petition. Consideration
of a Petition at a meeting shall be governed by the procedures described
in Sec. 907.14.
(b) Final Decision. The Board of Directors shall render a Final
Decision on the issue(s) presented in a Petition or Request to Intervene
that has been accepted for consideration, based upon consideration of
the entire record of the proceeding. The terms and conditions of the
Final Decision shall bind the parties as to any issue(s) presented in
the Petition or Request to Intervene and decided by the Board of
Directors. The decision of the Board of Directors is a final decision
for purposes of obtaining judicial review or as otherwise provided by
law.
(c) Time periods. Subject to extension by such additional time as
may reasonably be required, the Board of Directors shall render a Final
Decision within 120 calendar days of the date the Petition is received
in a form deemed by the Managing Director to be in compliance with the
requirements of Sec. 907.10 or, if the Petition has been the subject of
a request under Sec. 907.12(d), within 120 calendar days of receipt of
a response from the Petitioner deemed by the Managing Director to
complete the information necessary for the Board of Directors to
consider the Petition.
(d) Transmittal of Final Decision. The Secretary to the Board shall
transmit the Final Decision of the Board of Directors to all parties to
the submission.
[64 FR 30883, June 9, 1999, as amended at 65 FR 8257, Feb. 18, 2000]
Sec. 907.14 Meetings of the Board of Directors to consider Petitions.
(a) Full and fair opportunity to be heard. Any meeting of the Board
of Directors to consider a Petition shall be conducted in a manner that
provides the parties a full and fair opportunity to be heard on the
issues accepted for consideration. Any such meeting shall be conducted
so as to permit an expeditious presentation of such issues.
(b) Participation in meeting. (1) The presence of a quorum of the
Board if Directors is required to conduct a meeting under this section.
Members of the Board of Directors are deemed present if they appear in
person or by telephone.
(2) An act of the Board of Directors requires the vote of a majority
of the members of the Board of Directors voting at a meeting at which a
quorum of the Board of Directors is present.
(3) A Final Decision may be reached by a vote of the Board of
Directors after the meeting at which the Petition has been considered.
Only those members of the Board of Directors present at the meeting at
which the Petition was considered may vote on issues presented in the
Petition and accepted for consideration. A vote of the majority of the
members of the Board of Directors eligible to vote and voting shall be
an act of the Board of Directors.
(c) Chairperson--(1) Presiding officer. The Chairperson, or a member
of the Board of Directors designated by the Chairperson, shall preside
over a meeting of the Board of Directors convened under this section.
(2) Authority of the Chairperson. The Chairperson shall have all
powers and discretion necessary to conduct the meeting in a fair and
impartial manner, to avoid unnecessary delay, to regulate the course of
the meeting and the conduct of the parties and their counsel, and to
discharge the duties of a presiding officer.
(3) Board of Directors may overrule the Chairperson. Any member of
the Board of Directors may, by motion, challenge any action, finding, or
determination made by the Chairperson in the course of the meeting, and
the Board of Directors, by majority vote, may overrule any action,
finding or determination of the Chairperson.
(d) Meeting may be closed. A party may request that the meeting, or
portion thereof, be closed to public observation. A request to close a
meeting shall be processed in accordance with the requirements of the
Government in the Sunshine Act (5 U.S.C. 552b) and the Finance Board's
implementing regulation (12 CFR part 912).
[[Page 24]]
(e) Location of meeting. Unless otherwise specified, all meetings of
the Board of Directors will be held in the Board Room of the Finance
Board at 1777 F Street, NW., Washington, DC, at the time specified in
the notice of meeting issued pursuant to 12 CFR 912.6.
(f) Presentation of issues--(1) Stipulations. Subject to the
Chairperson's discretion, the parties may agree to stipulations of law
or fact, including stipulations as to the admissibility of exhibits, and
present such stipulations at the meeting. Stipulations shall be made a
part of the record of the proceeding.
(2) Order of presentation. The Chairperson shall determine the order
of presentation of the issues, testimony of any witnesses, presentation
of any other information or document, and all other procedural matters
at the meeting.
(g) Record. The meeting shall be recorded and transcribed.
Transcripts of the proceedings shall be governed by 12 CFR 912.5(c). The
Petition and all supporting documentation shall be made a part of the
record, unless otherwise determined by the Chairperson. The Chairperson
may order the record corrected, upon motion to correct, upon stipulation
of the parties, or at the Chairperson's discretion.
(h) Admissibility of documents and testimony. (1) The Chairperson
has discretion to admit and make a part of the record documents and
testimony that are relevant, material, and reliable, and may elect not
to admit documents and testimony that are privileged, unduly
repetitious, or of little probative value.
(2) The Board of Directors shall give such weight to documents and
testimony admitted and made part of the record as it may deem reasonable
and appropriate.
(3) The Chairperson may admit and make a part of the record, in lieu
of oral testimony, statements of fact or opinion prepared by a witness.
The admissibility of the information contained in the statement shall be
subject to the same rules as if the testimony were provided orally.
(i) Official notice. All matters officially noticed by the
Chairperson shall appear on the record.
(j) Exhibits and documents--(1) Copies. A legible duplicate copy of
a document shall be admissible to the same extent as the original.
(2) Exhibits. Witnesses may use existing or newly created charts,
exhibits, calendars, calculations, outlines, or other graphic materials
to summarize, illustrate, or simplify the presentation of testimony.
Subject to the Chairperson's discretion, such materials may be used with
or without being admitted into the record.
(3) Identification. All exhibits offered into the record shall be
numbered sequentially and marked with a designation identifying the
sponsor. The original of each exhibit offered into the record or marked
for identification shall be retained in the record of the meeting,
unless the Chairperson permits substitution of a copy for the original.
(4) Exchange of Exhibits. One copy of each exhibit offered into the
record shall be furnished to each of the parties and to each member of
the Board of Directors. If the Chairperson does not fix a time for the
exchange of exhibits, the parties shall exchange copies of proposed
exhibits at the earliest practicable time before the commencement of the
meeting to consider the Petition. Parties are not required to exchange
exhibits submitted as rebuttal information before the meeting commences
if submission of the exhibits is not reasonably certain at that time.
(5) Authenticity. The authenticity of all documents submitted or
exchanged as proposed exhibits prior to the meeting shall be admitted
unless written objection is filed before the commencement of the
meeting, or unless good cause is shown for failing to file such a
written objection.
(k) Sanction for obstruction of the proceedings. The Board of
Directors may impose sanctions it deems appropriate for violation of any
applicable provision of this subpart or any applicable law, rule,
regulation, or order, or any dilatory, frivolous, or obstructionist
[[Page 25]]
conduct by any witness or counsel during the course of a meeting.
[64 FR 30883, June 9, 1999, as amended at 65 FR 8257, Feb. 18, 2000]
Sec. 907.15 General provisions.
(a) Waiver of requirements. The Managing Director may waive any
filing requirement or deadline in this subpart for good cause shown. The
Managing Director shall provide prompt notice of any such waiver to the
Board of Directors.
(b) Actions of the Managing Director subject to the authority of the
Board of Directors. The Board of Directors may overrule any action by
the Managing Director under this subpart.
(c) Withdrawal. At any time prior to the issuance by the Managing
Director of a Notice of Board Consideration pursuant to Sec. 907.12(g),
an authorized representative of a Petitioner may withdraw the Petition,
or an authorized representative of an Intervenor may withdraw the
Request to Intervene, by filing a written request to withdraw with the
Secretary to the Board. Only the Board of Directors may grant a request
to withdraw after issuance by the Managing Director of a Notice of Board
Consideration pursuant to Sec. 907.12(g). Unless otherwise agreed,
withdrawal of a Petition or Request to Intervene shall not foreclose a
Petitioner from resubmitting a Petition, or an Intervenor from
submitting a Request to Intervene, on the same or similar issues.
(d) Settlement agreement. (1) At any time during the course of
proceedings pursuant to this subpart, the Finance Board shall give
Petitioners and Intervenors the opportunity to submit offers of
settlement when the nature of the proceedings and the public interest
permit. With the approval of the Managing Director, an authorized
representative of a Petitioner or Intervenor may enter into a proposed
settlement agreement with the Finance Board disposing of some or all of
the issues presented in a Petition or Request to Intervene.
(2) No proposed settlement agreement shall be final until approved
by the Board of Directors. The Board of Directors shall consider any
proposed settlement agreement within 30 calendar days of receiving a
notice of the proposed settlement agreement. If the Board of Directors
disapproves or fails to approve a proposed settlement agreement within
30 days, the proposed settlement agreement shall be null and void and
the previously filed Petition or Request to Intervene shall be
considered in accordance with this subpart.
(3) A settlement agreement approved by the Board of Directors shall
be deemed final and binding on all parties to the agreement. At the time
a proposed settlement agreement becomes final, a Petition or Request to
Intervene previously filed by a party to the agreement shall be deemed
withdrawn as to all issues resolved in the agreement, and the parties to
the agreement shall be estopped from raising objection to those issues
or to the terms of the settlement agreement.
(e) No rights created; Finance Board not prohibited. Nothing in this
subpart shall be deemed to create any substantive or discovery right in
any party. Nothing in this subpart shall limit in any manner the right
of the Finance Board to conduct any examination or inspection of any
Bank or the Office of Finance, or to take any action with respect to a
Bank or the Office of Finance, or its directors, officers, employees or
agents, otherwise authorized by law.
(f) Exhaustion requirement. When seeking a Case-by-Case
Determination of any matter or review by the Board of Directors of any
Supervisory Determination, a Bank or the Office of Finance shall follow
the procedures in this subpart as a prerequisite to seeking judicial
review. Failure to do so shall be deemed to be a failure to exhaust all
available administrative remedies.
(g) Improper conduct prohibited. No party shall, by act or omission,
unduly burden or frustrate the efforts of the Board of Directors to
carry out its duties under the laws and regulations of the Finance
Board. A Petitioner or Intervenor shall confine its communications with
the Board of Directors, or any individual member thereof, concerning
issues raised in a pending Petition, to written communications for
inclusion in the record of the proceeding, filed with the Secretary to
the Board.
[[Page 26]]
(h) Costs. Petitioners are encouraged to contain costs associated
with the preparation and filing of Petitions and related personal
appearances, if any, at any meeting held by the Board of Directors under
this subpart. The Petitioner shall be solely responsible for all costs
associated with any such Petitions and appearances.
(i) Procedures are exclusive. All Case-by-Case Determinations by the
Board of Directors and all Reviews of Disputed Supervisory
Determinations shall be considered exclusively pursuant to the
procedures described in this subpart.
[64 FR 30883, June 9, 1999, as amended at 65 FR 8257, Feb. 18, 2000]
Sec. 907.16 Rules of practice.
In connection with any matter initiated or pending pursuant to this
part, petitioners, requestors or intervenors, or their representatives,
shall be subject to the provisions of subpart F of 12 CFR part 908. No
other provision of part 908 shall apply under this part
[67 FR 9903, Mar. 5, 2002]
PART 908_RULES OF PRACTICE AND PROCEDURE IN HEARINGS ON THE RECORD--Table
of Contents
Subpart A_Introduction
Sec.
908.1 Scope.
908.2 Definitions.
908.3 Rules of construction.
Subpart B_Scope and Authority_Enforcement Proceedings
908.4 Cease and desist proceedings.
908.5 Temporary cease and desist orders.
908.6 Civil money penalties.
908.7 Service of notice.
908.8 Subpoenas.
908.9 Hearings on the record.
908.10 Judicial review.
908.11 Jurisdiction and enforcement.
908.12 Notice after separation.
908.13 Public disclosure of final orders.
908.14 No implied private right of action.
908.15-908.19 [Reserved]
Subpart C_General Rules
908.20 Authority of the Board of Directors.
908.21 Authority of the presiding officer.
908.22 Public hearings.
908.23 Good faith certification.
908.24 Ex parte communications.
908.25 Filing of papers.
908.26 Service of papers.
908.27 Computing time.
908.28 Change of time limits.
908.29 Witness fees and expenses.
908.30 Settlement or other dispute resolution.
908.31 Right to supervise the Banks.
908.32 Collateral attacks on proceedings under this part.
908.33-908.39 [Reserved]
Subpart D_Pre-Hearing Proceedings
908.40 Commencement of proceeding and contents of notices.
908.41 Answer.
908.42 Amended pleadings.
908.43 Failure to appear.
908.44 Consolidation and severance of actions.
908.45 Motions.
908.46 Discovery.
908.47 Request for document discovery from parties.
908.48 Document subpoenas to nonparties.
908.49 Deposition of witness unavailable for hearing.
908.50 Interlocutory review.
908.51 Summary disposition.
908.52 Partial summary disposition.
908.53 Scheduling and prehearing conferences.
908.54 Pre-hearing submissions.
908.55 Hearing subpoenas.
908.56-908.59 [Reserved]
Subpart E_Hearing and Post-hearing Proceedings
908.60 Conduct of hearings.
908.61 Evidence.
908.62 Post-hearing filings.
908.63 Recommended decision and filing of record.
908.64 Exceptions to recommended decision.
908.65 Review by Board of Directors.
908.66 Exhaustion of administrative remedies.
908.67 Stay of final decision and order pending judicial review.
908.68-908.69 [Reserved]
Subpart F_Rules of Practice Before the Finance Board
908.70 Scope.
908.71 Practice before the Finance Board.
908.72 Appearances and practice in proceedings before the Finance Board.
908.73 Conflicts of interest.
908.74 Sanctions.
908.75 Censure, suspension, disbarment and reinstatement.
[[Page 27]]
Authority: 12 U.S.C. 1422b(a)(5), 4631(c) and (f), and 4632-4641.
Section 908.4 is also authorized by 12 U.S.C. 1818(b)(6) and (7).
Source: 67 FR 9903, Mar. 5, 2002, unless otherwise noted.
Subpart A_Introduction
Sec. 908.1 Scope.
This part prescribes rules of practice and procedure applicable to
any hearing with regard to:
(a) Cease and desist proceedings under section 2B(a)(5) of the Act
(12 U.S.C. 1422b(a)(5)); or
(b) Civil money penalty assessment proceedings under section
2B(a)(5) of the Act (12 U.S.C. 1422b(a)(5)).
Sec. 908.2 Definitions.
For purposes of this part--
Decisional employee means any employee of the Finance Board, except
the Office of General Counsel, or any member of the presiding officer's
staff who has not engaged in an investigative or prosecutorial role in
connection with the subject cease and desist or civil money penalty
proceedings and who may assist the Board of Directors or the presiding
officer, respectively, in preparing orders, recommended decisions,
decisions and other documents under this part.
Hearing means an adjudicatory proceeding conducted pursuant to this
part;
Notice means a written notice of charges or notice of assessment of
a civil money penalty so titled that served by the Finance Board upon a
respondent, which conforms to Sec. 908.40 and describes the alleged
violations with sufficient specificity to put the respondent on notice
of the nature and scope of the charges being brought against him, except
in the context of the plain meaning of the word notice in a provision,
such as reasonable notice or actual notice.
Party means, for purposes of subparts C through F of this part only,
the Finance Board or respondent.
Person means an individual, sole proprietor, partnership,
corporation, unincorporated association, trust, joint venture, pool,
syndicate, agency, Bank, or other entity or organization with the
exception of the Finance Board.
Presiding officer means an administrative law judge or other
qualified, neutral individual who is appointed by the Finance Board
under applicable law, and, pursuant to Title 5 of the United States
Code, may conduct a hearing or adjudicatory proceeding under this part.
Representative of record means an individual who is authorized to
represent a respondent (and includes a respondent who represents
himself) at a hearing conducted under this part and who has filed a
notice of appearance in accordance with Sec. 908.72.
Respondent means any person named in a notice of charges or notice
of determination to impose civil money penalties issued by the Finance
Board.
Safety and Soundness Act means the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501-4641) (Title
XIII of the Housing and Community Development Act of 1992, Pub. L. No.
102-550).
Violation includes any act or omission by any person, undertaken
alone or with one or more others, that causes directly or indirectly,
counsels, participates in, or otherwise furthers, aids or abets a
violation of the Act, other applicable law, regulation, or order of the
Finance Board.
Sec. 908.3 Rules of construction.
For purposes of this part--
(a) Any term in the singular includes the plural and the plural
includes the singular, if such use would be appropriate;
(b) Any use of a masculine, feminine, or neuter gender encompasses
all three, if such use would be appropriate; and
(c) Unless the context requires otherwise, a party's representative
of record, if any, may, on behalf of that party, take any action
required to be taken by the party.
Subpart B_Scope and Authority_Enforcement Proceedings
Sec. 908.4 Cease and desist proceedings.
(a) Notice of charges--(1) Grounds. The Finance Board may issue and
serve a notice of charges upon a Bank or any executive officer or
director of a Bank if the Finance Board determines that such party is
engaging or has engaged
[[Page 28]]
in, or, if the Finance Board has reasonable cause to believe is about to
engage in:
(i) An unsafe or unsound practice in conducting the business of the
Bank;
(ii) Any conduct that violates any provision of the Act or any
applicable law, order, rule or regulation; or
(iii) Any conduct that violates any condition imposed in writing by
the Finance Board in connection with the granting of any application or
other request by the Bank, or any written agreement between the Bank and
the Finance Board.
(2) Content of notice of charges. A notice of charges shall contain
a statement of the facts constituting the alleged conduct or violation
and otherwise shall conform to the requirements set forth in Sec.
908.40.
(b) Cease and desist order--(1) Issuance of order. An order to cease
and desist shall be issued in writing and only after the respondent has
been given the opportunity for a hearing on the record in accordance
with the requirements set forth in Sec. 908.9. If the Board of
Directors finds, based on the record of the hearing, that any conduct or
violation specified in the notice of charges has been established or if
a respondent consents (or is deemed to have consented pursuant to Sec.
908.43), the Board of Directors may issue and serve upon the respondent
an order requiring the respondent to cease and desist from any such
practice, violation or conduct, to take affirmative action to correct or
remedy the conditions resulting from any such practice, violation or
conduct, or to comply with such limitations on activities or functions
as may be prescribed therein.
(2) Affirmative action. The authority of the Board of Directors to
issue and serve a cease and desist order that requires a respondent to
take affirmative action to correct or remedy any conditions resulting
from any violation or practice with respect to which such order is
issued includes the authority to require a respondent to--
(i) Make restitution or provide reimbursement, indemnification, or
guarantee against loss if--
(A) The respondent was unjustly enriched in connection with the
violation, conduct or practice described in the order; or
(B) The violation, conduct or practice involved a reckless disregard
for the law or any applicable regulations or prior order of the Finance
Board;
(ii) Restrict the growth of the Bank;
(iii) Dispose of any loan or asset involved;
(iv) Rescind any agreement or contract;
(v) Employ qualified officers or employees (who may be subject to
approval by the Finance Board, as directed by the Finance Board); and
(vi) Take such other action as the Finance Board determines to be
appropriate.
(3) Authority to limit activities. The authority of the Board of
Directors to issue and serve a cease and desist order includes the
authority to place limitations on the activities or functions of a
respondent.
(c) Effective date of order. An order issued under paragraph (b) of
this section shall become effective upon the expiration of the 30-day
period beginning on the date of service of the order upon the
respondent, (except in the case of an order issued upon consent, which
shall become effective at the time specified therein), and shall remain
effective and enforceable as provided in the order, except to the extent
that the order is stayed, modified, terminated, or set aside by action
of the Board of Directors or otherwise as provided for in this part.
Sec. 908.5 Temporary cease and desist orders.
(a) Grounds. Whenever the Board of Directors determines that any
conduct or violation, or threatened conduct or violation, specified in a
notice of charges issued and served upon a respondent, or the
continuation of such conduct or violation, is likely to cause
insolvency, a significant depletion of total capital, or irreparable
harm to a Bank prior to the completion of the cease and desist
proceeding, the Board of Directors may issue a temporary order requiring
the respondent to cease and desist from any such conduct or violation,
or such threatened conduct or violation, and to take affirmative
[[Page 29]]
action to prevent or remedy such insolvency, depletion, or harm pending
completion of such proceedings. Such order may include any requirement
authorized under Sec. 908.4(b)(2).
(b) Incomplete records. If a notice of charges specifies that the
books and records of a Bank are so incomplete or inaccurate that the
Finance Board is unable, through the normal supervisory process, to
determine the financial condition of the Bank or the details or purpose
of any transaction or transactions that may have a material effect on
the financial condition of a Bank, the Finance Board may issue a
temporary order requiring a respondent to:
(1) Cease and desist from any activity or practice that caused or
contributed to, whether in whole or in part, the incomplete or
inaccurate state of the books or records of a Bank; or
(2) Take affirmative action to restore the books or records to a
complete and accurate state.
(c) Effective date. Any temporary order issued pursuant to this
section shall become effective upon service upon the respondent.
(d) Effective period. (1) Any temporary order issued under paragraph
(a) of this section, unless set aside, limited, or suspended by a court
in a proceeding under paragraph (e) of this section, shall remain in
effect and enforceable pending the completion of the proceeding on the
notice of charges and shall remain effective until the Board of
Directors dismisses the charges specified in the notice of charges or it
is superceded by a cease and desist order.
(2) Any temporary order issued under paragraph (b) of this section,
unless set aside, limited, or suspended by a court in proceedings
pursuant to paragraph (e) of this section, shall remain in effect and
enforceable until the earlier of the completion of the proceeding on the
notice of charges, or the date that the Finance Board determines, by
examination or otherwise, that the books and records of the Bank are
accurate and reflect the financial condition of the Bank.
(e) Judicial relief. As authorized by section 2B(a)(5) of the Act
(12 U.S.C. 1422b(a)(5)) and sections 1372(d) and 1375(b) of the Safety
and Soundness Act (12 U.S.C. 4632(d) and 4635(b)), a respondent that has
been served with a temporary order may apply to the United States
District Court for the District of Columbia within ten days after such
service for an injunction setting aside, limiting, or suspending the
enforcement, operation, or effectiveness of the order pending the
completion of the hearing pursuant to the notice of charges.
(f) Enforcement of temporary order. If a respondent violates,
threatens to violate, or fails to obey, a temporary order issued
pursuant to this section, the Finance Board may bring an action in the
United States District Court for the District of Columbia for an
injunction to enforce such temporary order, as authorized by sections
2B(a)(5) and 2B(a)(7) of the Act (12 U.S.C. 1422b(a)(5) and (a)(7)) and
section 1372(e) of the Safety and Soundness Act (12 U.S.C. 4632(e)).
Sec. 908.6 Civil money penalties.
(a) Notice of assessment. (1) Grounds. The Finance Board may issue
and serve a notice of assessment of a civil money penalty on any Bank or
any executive officer or director of a Bank that:
(i) Violates any provision of the Act, or any order, rule, or
regulation issued under the Act;
(ii) Violates any final or temporary cease and desist order issued
by the Finance Board pursuant to the Act;
(iii) Violates any written agreement between a Bank and the Finance
Board; or
(iv) Engages in any conduct that causes or is likely to cause a loss
to a Bank.
(2) Content of notice. A notice of assessment of a civil money
penalty shall contain a statement of the facts constituting the alleged
conduct or violation and otherwise conform to the requirements set forth
in Sec. 908.40.
(b) Order assessing penalty. An order assessing a civil money
penalty shall be issued in writing and only after the respondent has
been given the opportunity for a hearing on the record in accordance
with the procedures set forth in Sec. 908.9. If the Board of Directors
finds, based on the record of the hearing, that any conduct or violation
specified in the notice of assessment of
[[Page 30]]
a civil money penalty has been established or if a respondent consents
(or is deemed to have consented pursuant to Sec. 908.43), the Board of
Directors may issue and serve upon the respondent an order assessing a
civil money penalty.
(c) Amount of penalty. (1) The Finance Board may impose a civil
money penalty under paragraph (b) of this section against a Bank for a
violation described in paragraph (a)(i) through (iii) of this section in
an amount not to exceed $5,000.00 for each day that such violation
continues;
(2) The Finance Board may impose a civil money penalty on an
executive officer or director of a Bank in an amount not to exceed
$10,000.00, or on a Bank in an amount not to exceed $25,000.00, for each
day that a violation or conduct described in paragraph (a) of this
section continues, if the Finance Board finds that the violation or
conduct:
(i) Is part of a pattern of misconduct; or
(ii) Involved recklessness and caused or would be likely to cause a
material loss to a Bank; or
(3) The Finance Board may impose a civil money penalty on an
executive officer or director of a Bank in an amount not to exceed
$100,000.00, or on a Bank in an amount not to exceed $1,000,000.00, for
each day that a violation or conduct described in paragraph (a) of this
section continues, if the Finance Board finds that the violation or
conduct was knowing and caused or would be likely to cause a substantial
loss to a Bank.
(d) Factors in determining the amount of the penalty. In determining
the amount of the civil money penalty to be assessed under this section,
the Finance Board shall consider such factors as the gravity of the
violation, any history of prior violations, the good faith of the
officer or director of a Bank, the effect of the penalty on promoting or
protecting the safety and soundness of a Bank or the Bank System, any
injury to members of the subject Bank or to the public at large, any
benefits received, and the potential for the deterrence of future
violations.
(e) Judicial relief. Pursuant to section 2B(a)(5) of the Act (12
U.S.C. 1422b(a)(5)) and section 1376(c)(3) of the Safety and Soundness
Act (12 U.S.C. 4636(c)(3)), an order of the Board of Directors imposing
a civil money penalty under this subsection shall not be subject to
judicial review except as otherwise provided in Sec. 908.10, in
accordance with section 1374 of the Safety and Soundness Act (12 U.S.C.
4634).
(f) Judicial enforcement of an order imposing a penalty. Pursuant to
sections 2B(a)(5) and 2B(a)(7) of the Act (12 U.S.C. 1422b(a)(5) and
(a)(7)) and section 1376(d) of the Safety and Soundness Act (12 U.S.C.
4636(d)), if a Bank, or an executive officer or director of a Bank,
fails to comply with an order of the Board of Directors imposing a civil
money penalty, the Finance Board may seek to enforce the order as
follows:
(1) After the order is final and no longer subject to judicial
review under Sec. 908.10, the Finance Board may bring an action in the
United States District Court for the District of Columbia to obtain a
monetary judgment against a Bank or the executive officer or director of
a Bank;
(2) The Finance Board may, in addition, seek such other relief as
may be available from the District Court;
(3) The monetary judgment may, in the discretion of the District
Court, include any attorneys fees and other expenses incurred by the
Finance Board in connection with the action; and
(4) The validity and appropriateness of the Board of Directors'
order assessing a civil money penalty shall not be subject to review of
the United States District Court for the District of Columbia.
(g) Board of Directors' authority to review. The Board of Directors
may:
(1) Review any order to assess a civil money penalty or any
interlocutory ruling arising from a hearing on the record, or
(2) Settle, modify, or remit in whole or in part, any civil money
penalty, which may be or may have been assessed under this section.
(h) Availability of other remedies. Any civil money penalty assessed
under this section shall be in addition to any other available civil
remedy and may be assessed whether or not the Finance Board imposes
other administrative sanctions pursuant to this part.
[[Page 31]]
(i) Prohibition of reimbursement or indemnification. A Bank shall
not reimburse, indemnify, or otherwise compensate directly or indirectly
any executive officer or director for any penalty imposed against such
individual under paragraph (c)(3) of this section.
(j) Applicability. Any penalty under this part may be imposed only
for conduct or violations occurring after November 12, 1999.
(k) Adjustment of civil money penalties by the rate of inflation.
Pursuant to the Federal Civil Penalties Inflation Adjustment Act of
1990, as amended by the Debt Collection Improvement Act of 1996, Pub.
Law No. 104-134 (1996) (collectively, the Inflation Adjustment Act) (to
be codified at 28 U.S.C. 2461 note), the Finance Board is required to
adjust each civil money penalty set forth herein by a prescribed cost-
of-living adjustment at least once every four years. The adjustment is
based on the formula prescribed in section 5(b) of the Inflation
Adjustment Act (28 U.S.C. 2461 note).
Sec. 908.7 Service of notice.
In accordance with section 2B(a)(5) of the Act (12 U.S.C.
1422b(a)(5)) and section 1379A of the Safety and Soundness Act (12
U.S.C. 4640), any service required or authorized to be made by the
Finance Board under this part may be made by registered mail, or in such
other manner reasonably calculated to give actual notice as the Finance
Board may by regulation or otherwise provide.
Sec. 908.8 Subpoenas.
(a) Authority. Pursuant to section 2B(a)(5) of the Act (12 U.S.C.
1422b(a)(5)) and section 1379B of the Safety and Soundness Act (12
U.S.C. 4641), the Finance Board, in the course of or in connection with
a hearing under this part, shall have the authority:
(1) To administer oaths and affirmations;
(2) To take and preserve testimony under oath;
(3) To issue subpoenas and subpoenas duces tecum; and
(4) To revoke, quash, or modify subpoenas and subpoenas duces tecum
issued by the Finance Board pursuant to this part.
(b) Witnesses and documents. The attendance of witnesses and the
production of documents provided for in this subsection may be required
from any place in any State at any designated place where such
proceeding is being conducted.
(c) Enforcement. The Finance Board may file an action in the United
States district court for the judicial district where the proceeding is
being conducted or where the witness resides or conducts business, or in
the United States District Court for the District of Columbia, for
enforcement of any subpoena or subpoena duces tecum issued pursuant to
this section. Such courts shall have jurisdiction over such actions and
power to order and require compliance with such subpoenas and subpoenas
duces tecum.
(d) Fees and expenses. Witnesses subpoenaed under this section shall
be paid the same fees and mileage that are paid witnesses in the
district courts of the United States. Any court having jurisdiction of
any proceeding instituted under this section by a Bank may allow to any
such party such reasonable expenses and attorneys fees as the court
deems just and proper. Such expenses shall be paid by the Bank or from
its assets.
Sec. 908.9 Hearings on the record.
(a) Requirements--(1) Venue and record. Pursuant to section 2B(a)(5)
of the Act (12 U.S.C. 1422b(a)(5)) and section 1373 of the Safety and
Soundness Act (12 U.S.C. 4633), any hearing conducted pursuant to
Sec. Sec. 908.4 or 908.6 shall be held on the record and in the
District of Columbia.
(2) Timing. Any hearing shall be set for a date not earlier than
thirty (30) days nor later than sixty (60) days after service of a
notice, unless an earlier or a later date is set by the presiding
officer at the request of the party served.
(3) Procedure. Any hearing held pursuant to Sec. Sec. 908.4 or
908.6 shall be conducted in accordance with chapter 5 of Title 5 of the
United States Code.
(4) Failure to appear. If a respondent fails to appear at a hearing
individually or through a duly authorized representative, the respondent
shall be deemed to have consented to the issuance of a cease and desist
order or
[[Page 32]]
an order assessing a civil money penalty for which the hearing is held.
(5) Open to the public. All hearings on the record with respect to
any notice issued by the Finance Board shall be open to the public,
unless the Board of Directors, in its discretion, determines that
holding an open hearing would be contrary to the public interest.
(b) Issuance of final order. After a hearing on the record has been
concluded, and within 90 days after the parties have been notified that
the case has been submitted to the Board of Directors for final
decision, the Board of Directors shall render the final decision (which
shall include findings of fact upon which the decision is predicated)
and shall issue and serve upon each party to the proceeding a final
order or orders consistent with the provisions.
(c) Judicial review and modification of final orders. Judicial
review of any such final decision and order shall be exclusively as
provided for in Sec. 908.10, pursuant to section 2B(a)(5) of the Act
(12 U.S.C. 1422b(a)(5)) and sections 1373 and 1374 of the Safety and
Soundness Act (12 U.S.C. 4633 and 4634). Unless a petition for review is
timely filed as provided in Sec. 908.10, and thereafter until the
record in the proceeding has been filed as so provided, the Board of
Directors may at any time modify, terminate, or set aside any such final
decision and order, upon such notice and in such manner as the Board of
Directors, in its sole discretion, considers proper. Upon such filing of
the record, the Board of Directors may modify, terminate, or set aside
any such final decision and order with permission of the court.
Sec. 908.10 Judicial review.
(a) Authority. Pursuant to section 2B(a)(5) of the Act (12 U.S.C.
1422b(a)(5)) and section 1374 of the Safety and Soundness Act (12 U.S.C.
4634), any party to a hearing may obtain judicial review of a final
decision and order issued under Sec. Sec. 908.4 or 908.6 exclusively by
filing a written petition in the United States Court of Appeals for the
District of Columbia Circuit within thirty (30) days after the date of
service of the final decision and order, requesting the court to modify,
terminate or set aside the final decision and order.
(b) Filing of record. Upon receiving a copy of the petition from the
clerk of the court of appeals, the Finance Board shall file the hearing
record with the clerk, as provided in section 2112 of Title 28 of the
United States Code (28 U.S.C. 2112).
(c) Jurisdiction. Pursuant to section 2B(a)(5) of the Act (12 U.S.C.
1422b(a)(5)) and section 1374(c) of the Safety and Soundness Act (12
U.S.C. 4634(c)), upon the filing of a petition, the court of appeals
shall have jurisdiction, which upon the filing of the record by the
Finance Board (except as otherwise provided in Sec. 908.9) shall be
exclusive, to affirm, modify, terminate or set aside, in whole or in
part, a final decision and order of the Board of Directors.
(d) Review. Review by the court of appeals of a final decision and
order of the Board of Directors and the record of any hearing conducted
pursuant to this part shall be governed by chapter 7 of Title 5 of the
United States Code (5 U.S.C. 701 et seq.).
(e) Order to pay civil money penalty. In connection with its review
of a final order pursuant to this part, the court of appeals shall have
authority in accordance with section 2B(a)(5) of the Act (12 U.S.C.
1422b(a)(5)) and section 1374(e) of the Safety and Soundness Act (12
U.S.C. 4634(e)), to order payment of any civil money penalty imposed by
the Finance Board.
(f) No automatic stay. In accordance with section 2B(a)(5) of the
Act (12 U.S.C. 1422b(a)(5)) and section 1374(f) of the Safety and
Soundness Act (12 U.S.C. 4634(f)), the commencement of an action for
judicial review of a final decision and order of the Board of Directors
under this section shall not operate as a stay of any such order, unless
the court of appeals specifically orders a stay of the order in whole or
in part.
Sec. 908.11 Jurisdiction and enforcement.
(a) Enforcement. In accordance with sections 2B(a)(5) and 2B(a)(7)
of the Act (12 U.S.C. 1422b(a)(5) and (a)(7)) and section 1375(a) of the
Safety and Soundness Act (12 U.S.C. 4635(a)), the Finance Board may
bring an action in the United States District Court for the
[[Page 33]]
District of Columbia for the enforcement of any effective order issued
by the Board of Directors under this part. Such court shall have
jurisdiction and power to order and require compliance with such order.
(b) Limitation on jurisdiction. In accordance with sections 2B(a)(5)
and 2B(a)(7) of the Act (12 U.S.C. 1422b(a)(5) and (a)(7)) and section
1375(b) of the Safety and Soundness Act (12 U.S.C. 4635(b)), and except
as otherwise provided in the Act, no court shall have jurisdiction to
affect, by injunction or otherwise, the issuance or enforcement of any
order issued by the Board of Directors under this part, or to review,
modify, suspend, terminate, or set aside any such notice or order.
Sec. 908.12 Notice after separation.
The resignation, termination of employment or participation, or
separation of a director or executive officer of a Bank shall not affect
the jurisdiction and authority of the Finance Board to issue any notice
and proceed under this part against any such director or executive
officer, if such notice is served before the end of the two-year period
beginning on the date such director or executive officer ceases to be
associated with the Bank.
Sec. 908.13 Public disclosure of final orders.
(a) In general. The Finance Board shall make available to the
public--
(1) Any written agreement or other written statement for which a
violation may be redressed by the Finance Board or any modification to
or termination thereof, unless the Finance Board in its discretion,
determines that public disclosure would be contrary to the public
interest;
(2) Any order that is issued by the Board of Directors and that has
become final in accordance with this part; and
(3) Any modification to or termination of any final order made
public pursuant to this part.
(b) Delay of public disclosure under exceptional circumstances. If
the Finance Board determines in writing that the public disclosure,
pursuant to paragraph (a) of this section, of any final decision and
order of the Board of Directors would seriously threaten the financial
health or security of a Bank, the Finance Board may delay the public
disclosure of such decision and order for a reasonable time.
(c) Documents filed under seal. The Finance Board may file any
document or part thereof under seal in any hearing commenced by the
Finance Board under this part, if it determines in writing that
disclosure thereof would be contrary to the public interest.
(d) Retention of documents. The Finance Board shall keep and
maintain a record, for not less than six years, of all documents
described in paragraph (a) of this section and all enforcement
agreements and other supervisory actions and supporting documents issued
with respect to or in connection with any enforcement proceeding
initiated by the Finance Board under this part or any other law.
(e) Disclosure to Congress. This section may not be construed to
authorize the withholding, or to prohibit the disclosure, of any
information to the Congress or any committee or subcommittee thereof.
Sec. 908.14 No implied private right of action.
This part shall not create any private right of action on behalf of
any person against a Bank or any director or executive officer of a Bank
or impair any existing private right of action under applicable law.
Sec. Sec. 908.15-908.19 [Reserved]
Subpart C_General Rules
Sec. 908.20 Authority of the Board of Directors.
The Board of Directors may, at any time during the pendency of a
proceeding under this part, perform, direct the performance of, or waive
the performance of any act that could be done or ordered by the
presiding officer.
Sec. 908.21 Authority of the presiding officer.
(a) General rule. All cease and desist or civil money penalty
proceedings governed by this subpart shall be conducted in a hearing on
the record in accordance with the provisions of the Administrative
Procedure Act, 5 U.S.C.
[[Page 34]]
551-559. The presiding officer shall have complete charge of the
hearing, conduct a fair and impartial hearing, avoid unnecessary delay,
and assure that a record of the hearing is made.
(b) Powers. The presiding officer shall have all powers necessary to
conduct the hearing in accordance with paragraph (a) of this section and
5 U.S.C. 556(c). The presiding officer is authorized to--
(1) Set and change the date, time and place of the hearing upon
reasonable notice to the parties;
(2) Continue or recess the hearing in whole or in part for a
reasonable period of time;
(3) Hold conferences to identify or simplify the issues, or to
consider other matters that may aid in the expeditious disposition of
the proceeding, including settlement conferences, mediation or other
consensual methods of dispute resolution;
(4) Administer oaths and affirmations;
(5) Issue subpoenas, subpoenas duces tecum, and protective orders,
as authorized by this part, and to revoke, quash, or modify such
subpoenas;
(6) Take and preserve testimony under oath;
(7) Rule on motions and other procedural matters appropriate in a
hearing, except that only the Board of Directors shall have the power to
grant any motion to dismiss a cease and desist or civil money penalty
proceeding or to make a final determination on the merits of such
proceedings;
(8) Regulate the scope and timing of discovery;
(9) Regulate the course of the hearing and the conduct of
representatives and parties;
(10) Examine witnesses;
(11) Receive, exclude, limit, or otherwise rule on evidence;
(12) Upon motion of a party, take official notice of facts;
(13) Recuse herself/himself upon motion made by a party or on her or
his own motion;
(14) Prepare and present to the Board of Directors a recommended
decision as provided in this part;
(15) Establish time, place and manner limitations on the attendance
of the public and the media for any public hearing; and
(16) Do all other things necessary and appropriate to discharge the
duties of a presiding officer.
Sec. 908.22 Public hearings.
(a) General rule. All hearings shall be open to the public, unless
the Finance Board, in its discretion, determines that holding an open
hearing would be contrary to the public interest. The Finance Board may
make such determination sua sponte at any time by written notice to all
parties.
(b) Motion for closed hearing. Within twenty (20) days of service of
a notice, any party or respondent may file with the presiding officer a
motion for a non-public hearing and any party may file a pleading in
reply to the motion. The presiding officer shall forward the motion and
any reply, together with a recommended decision on the motion, to the
Board of Directors, who shall make a final determination. Such motions
and replies shall be governed by Sec. 908.45.
(c) Filing documents under seal. The Finance Board, in its
discretion, may file any document, or any part of any document, under
seal if the agency makes a written determination that disclosure of the
document would be contrary to the public interest. The presiding officer
shall take all appropriate steps to preserve the confidentiality of such
documents or parts thereof, including closing portions of the hearing to
the public.
Sec. 908.23 Good faith certification.
(a) General requirement. Every filing or submission of record
following the issuance of a notice by the Finance Board shall be signed
by at least one representative of record in her or his individual name
and shall state that representative's address and telephone number and
the names, addresses and telephone numbers of all other representatives
of record for the person making the filing or submission.
(b) Effect of signature. (1) By signing a document, the
representative of record or party certifies that--
(i) The representative of record or party has read the filing or
submission of record;
[[Page 35]]
(ii) To the best of her or his knowledge, information and belief
formed after reasonable inquiry, the filing or submission of record is
well-grounded in fact and is warranted by existing law or a good faith,
non-frivolous argument for the extension, modification, or reversal of
existing law, regulation or Finance Board policy or order; and
(iii) The filing or submission of record is not made for any
improper purpose, such as to harass or to cause unnecessary delay or
needless increase in the cost of litigation.
(2) If a filing or submission of record is not signed, the presiding
officer shall strike the filing or submission of record, unless it is
signed promptly after the omission is called to the attention of the
pleader or movant.
(c) Effect of making oral motion or argument. The act of making any
oral motion or oral argument by any representative or party shall
constitute a certification that to the best of her or his knowledge,
information, and belief, formed after reasonable inquiry, such
expressions or statements are well-grounded in fact and are warranted by
existing law or a good faith, non-frivolous argument for the extension,
modification, or reversal of existing law, regulation, or Finance Board
policy or order, and are not made for any improper purpose, such as to
harass or to cause unnecessary delay or needless increase in the cost of
litigation.
Sec. 908.24 Ex parte communications.
(a) Definition.(1) Ex parte communication means any material oral or
written communication relevant to the merits of a cease and desist or
civil money penalty proceeding under this part that was neither on the
record nor on reasonable prior notice to all parties that takes place
between--
(i) An interested person outside the Finance Board (including the
person's representative); and
(ii) The presiding officer handling the proceeding, the Board of
Directors or any member thereof, a decisional employee of the Finance
Board assigned to that proceeding, or any other person who is or may
reasonably be expected to be involved in the decisional process.
(2) A communication that does not concern the merits of a proceeding
under this part, such as a request for status of the proceeding, does
not constitute an ex parte communication.
(b) Prohibition of ex parte communications. From the time that a
notice commencing a proceeding under this part is issued by the Finance
Board until the date that the Board of Directors issues its final
decision pursuant to Sec. 908.65, no person referred to in paragraph
(a)(1)(i) of this section shall knowingly make or cause to be made an ex
parte communication. The Board of Directors, any member thereof
individually, the presiding officer, or an employee of the Finance
Board, shall not knowingly make or cause to be made an ex parte
communication.
(c) Procedure upon occurrence of ex parte communication. If an ex
parte communication is received by any person identified in paragraph
(a) of this section, that person promptly shall cause all such written
communications (or, if the communication is oral, a memorandum stating
the substance of the communication) to be placed on the record of the
proceeding and served on all parties. All parties to the proceeding
shall have an opportunity, within ten days of receipt of service of the
ex parte communication or the written record of an oral communication,
to file responses thereto and to recommend any sanctions, in accordance
with paragraph (d) of this section, that they believe to be appropriate
under the circumstances.
(d) Sanctions. Any party or representative for a party who makes an
ex parte communication, or who encourages or solicits another person or
entity to make any such communication, may be subject to any appropriate
sanction or sanctions imposed by the Board of Directors or the presiding
officer, including, but not limited to, exclusion from the proceedings
and an adverse ruling on the issue that is the subject of the prohibited
communication.
(e) Consultations by presiding officer. Except to the extent
required for the disposition of ex parte matters as authorized by law,
the presiding officer may not consult a person or party on any matter
relevant to the merits of a
[[Page 36]]
proceeding, unless on notice and opportunity for all parties to
participate.
(f) Separation of functions. An employee or agent engaged in the
performance of investigative or prosecuting functions for the Finance
Board in a case may not, in that or a factually related case,
participate or advise in the decision, recommended decision, or Board of
Directors' review of the recommended decision under Sec. 908.65, except
as a witness or counsel in a hearing.
Sec. 908.25 Filing of papers.
(a) Filing. Any papers required to be filed shall be addressed to
the presiding officer and filed with the Finance Board, 1777 F Street,
NW., Washington, DC 20006.
(b) Manner of filing. Unless otherwise specified by the Finance
Board or the presiding officer, filing shall be accomplished by:
(1) Personal service;
(2) Delivery to the U.S. Postal Service or to a reliable commercial
delivery service for same day or overnight delivery;
(3) Mailing by first class, registered, or certified mail; or
(4) Transmission by electronic media upon any conditions specified
by the Finance Board or the presiding officer. All papers filed by
electronic media shall also concurrently be filed in accordance with
paragraph (c) of this section.
(c) Formal requirements as to papers filed--(1) Form. All papers
must set forth the name, address and telephone number of the
representative or party making the filing and must be accompanied by a
certification setting forth when and how service has been made on all
other parties. All papers filed must be double-spaced and printed or
typewritten on 8\1/2\ x 11-inch paper and must be clear and legible.
(2) Signature. All papers must be dated and signed as provided in
Sec. 908.23.
(3) Caption. All papers filed must include at the head thereof, or
on a title page, the name of the Finance Board and of the filing party,
the title and docket number of the proceeding and the subject of the
particular paper.
(4) Number of copies. Unless otherwise specified by the Finance
Board or the presiding officer, an original and one copy of all
documents, papers, transcripts of testimony, and exhibits shall be
filed.
Sec. 908.26 Service of papers.
(a) By the parties. Except as otherwise provided, a party filing
papers or serving a subpoena shall serve a copy upon the representative
of record for each party to the proceeding so represented and upon any
party not so represented.
(b) Method of service. Except as provided in paragraphs (c)(2) and
(d) of this section, a serving party shall use one or more of the
following methods of service:
(1) Personal service;
(2) Delivery to the U.S. Postal Service or to a reliable commercial
delivery service for same day or overnight delivery;
(3) Mailing by first class, registered, or certified mail; or
(4) Transmission by electronic media, only if the parties mutually
agree. Any papers served by electronic media shall also concurrently be
served in accordance with the requirements of Sec. 908.25(c).
(c) By the Finance Board or the presiding officer. (1) All papers
required to be served by the Finance Board or the presiding officer upon
a party who has appeared in the proceeding in accordance with Sec.
908.72 may be served by any means specified in paragraph (b) of this
section.
(2) If a notice of appearance has not been filed in the proceeding
for a party in accordance with Sec. 908.72, the Finance Board or the
presiding officer shall make service upon such party by any of the
following methods:
(i) By personal service;
(ii) If the person to be served is an individual, by delivery to a
person of suitable age and discretion at the physical location where the
individual resides or works;
(iii) If the person to be served is a corporation or other
association, by delivery to an officer, managing or general agent, or to
any other agent authorized by appointment or by law to receive service
and, if the agent is one authorized by statute to receive service and
the statute so requires, by also mailing a copy to the party;
[[Page 37]]
(iv) By registered or certified mail addressed to the person's last
known address; or
(v) By any other method reasonably calculated to give actual notice.
(d) Subpoenas. Subject to applicable provisions in this part,
service of a subpoena may be made:
(1) By personal service;
(2) If the person to be served is an individual, by delivery to a
person of suitable age and discretion at the physical location where the
individual resides or works;
(3) If the person to be served is a corporation or other
association, by delivery to an officer, managing or general agent, or to
any other agent authorized by appointment or by law to receive service
and, if the agent is one authorized by statute to receive service and
the statute so requires, by also mailing a copy to the party;
(4) By registered or certified mail addressed to the person's last
known address; or
(5) By any other method reasonably calculated to give actual notice.
(e) Area of service. Service in any State, commonwealth, possession,
territory of the United States or the District of Columbia on any person
doing business in any State, commonwealth, possession, territory of the
United States or the District of Columbia, or on any person as otherwise
permitted by law, is effective without regard to the place where the
hearing is held.
(f) Proof of service. Proof of service of papers filed by a party
shall be filed before action is taken thereon. The proof of service,
which shall serve as prima facie evidence of the fact and date of
service, shall show the date and manner of service and may be by written
acknowledgment of service, by declaration of the person making service,
or by certificate of a representative of record. However, failure to
file proof of service contemporaneously with the papers shall not affect
the validity of actual service. The presiding officer may allow the
proof to be amended or supplied, unless to do so would result in
material prejudice to a party.
Sec. 908.27 Computing time.
(a) General rule. In computing any period of time prescribed or
allowed by this subpart, the date of the act or event that commences the
designated period of time is not included. The last day so computed is
included unless it is a Saturday, Sunday, or Federal holiday. When the
last day is a Saturday, Sunday or Federal holiday, the period shall run
until the end of the next day that is not a Saturday, Sunday, or Federal
holiday. Intermediate Saturdays, Sundays and Federal holidays are
included in the computation of time. However, when the time period
within which an act is to be performed is ten (10) days or less, not
including any additional time allowed for in paragraph (c) of this
section, intermediate Saturdays, Sundays and Federal holidays are not
included.
(b) When papers are deemed to be filed or served. (1) Filing and
service are deemed to be effective--
(i) In the case of personal service or same day reliable commercial
delivery service, upon actual service;
(ii) In the case of U.S. Postal Service or reliable commercial
overnight delivery service, or first class, registered, or certified
mail, upon deposit in or delivery to an appropriate point of collection;
or
(iii) In the case of transmission by electronic media, as specified
by the authority receiving the filing in the case of filing, and as
agreed among the parties in the case of service.
(2) The effective filing and service dates specified in paragraph
(b)(1) of this section may be modified by the Finance Board or the
presiding officer in the case of filing or by agreement of the parties
in the case of service.
(c) Calculation of time for service and filing of responsive papers.
Whenever a time limit is measured by a prescribed period from the
service of any notice or paper, the applicable time limits shall be
calculated as follows:
(1) If service was made by first class, registered, or certified
mail, or by delivery to the U.S. Postal Service for longer than
overnight delivery service, add three (3) calendar days to the
prescribed period for the responsive filing.
(2) If service was made by U.S. Postal Service or reliable
commercial overnight delivery service, add one (1) calendar day to the
prescribed period for the responsive filing.
[[Page 38]]
(3) If service was made by electronic media transmission, add one
(1) calendar day to the prescribed period for the responsive filing,
unless otherwise determined by the Board of Directors or the presiding
officer in the case of filing, or by agreement among the parties in the
case of service.
Sec. 908.28 Change of time limits.
Except as otherwise provided by law, the presiding officer may, for
good cause shown, extend the time limits prescribed above or prescribed
by any notice or non-dispositive order issued under this part. After the
referral of the case to the Board of Directors pursuant to Sec. 908.63,
the Board of Directors may grant extensions of the time limits for good
cause shown. Extensions may be granted on the motion of a party after
notice and opportunity to respond is afforded all nonmoving parties, or
on the Board of Directors' or the presiding officer's own motion.
Sec. 908.29 Witness fees and expenses.
Witnesses (other than parties) subpoenaed for testimony or
depositions shall be paid the same fees for attendance and mileage as
are paid to witnesses pursuant to the Federal Rules of Civil Procedure
(title 28 of the U.S. Code) governing proceedings in the United States
district courts, in which the United States is a party, provided that,
in the case of a discovery subpoena addressed to a party, no witness
fees or mileage shall be paid. Fees for witnesses shall be tendered in
advance by the party requesting the subpoena, except that fees and
mileage need not be tendered in advance where the Finance Board is the
issuer of the subpoena. The Finance Board shall not be responsible for
or required to pay any fees to or expenses of any witness not subpoenaed
by the Finance Board.
Sec. 908.30 Settlement or other dispute resolution.
Any respondent may, at any time in a cease and desist or civil money
penalty proceeding, unilaterally submit to the Finance Board's counsel
of record written offers or proposals for settlement of such proceeding
in whole or in part without prejudice to the rights of any of the
parties. Any such offer or proposal shall be made exclusively to the
Finance Board. Submission of a written settlement offer does not provide
a basis for adjourning or otherwise delaying all or any portion of a
proceeding under this part. Any party to a proceeding under this part
may request a neutral individual preside over settlement negotiations.
No settlement offer or proposal, or any subsequent negotiation or
resolution, is admissible as evidence in any proceeding under this part
or any court.
Sec. 908.31 Right to supervise the Banks.
Nothing contained in this part shall limit in any manner the right
of the Finance Board to conduct any examination, inspection, or
visitation of any Bank, or the right of the Finance Board to conduct or
continue any form of investigation authorized by law. Nothing set forth
in this part shall restrict or be deemed to restrict the authority of
the Finance Board to supervise the Banks or to issue or enforce orders
or directives pursuant to section 2B(a)(1), or any other provision, of
the Act (12 U.S.C. 1422b(a)(1)).
Sec. 908.32 Collateral attacks on proceedings under this part.
If a respondent files in any court a collateral attack that purports
to challenge all or any portion of a proceeding under this part, the
hearing on the merits shall continue without regard to the pendency of
any such challenge action. No default or other failure to act as
directed in the hearing within the times prescribed in this subpart
shall be excused based on the pendency of any such challenge action.
Sec. Sec. 908.33-908.39 [Reserved]
Subpart D_Pre-Hearing Proceedings
Sec. 908.40 Commencement of proceeding and contents of notices.
Proceedings under this part are commenced by the issuance of a
notice of charges or a notice of assessment of a civil money penalty
(notice). A notice that is served by the Finance Board upon a respondent
in accordance with Sec. 908.7 shall state all of the following:
[[Page 39]]
(a) The legal authority for the proceeding and for the Finance
Board's jurisdiction over the proceeding;
(b) A statement of the matters of fact or law showing that the
Finance Board is entitled to relief;
(c) A proposed order or prayer for an order granting the requested
relief;
(d) The time, place and nature of the hearing;
(e) The time within which to file an answer;
(f) The time within which to request a hearing; and
(g) The address for filing the answer and/or request for a hearing.
Sec. 908.41 Answer.
(a) Deadline for filing answer. Unless otherwise specified by the
Finance Board in the notice, respondent shall file an answer within
twenty (20) days of service of the notice.
(b) Content of answer. An answer shall respond specifically to each
paragraph or allegation of fact contained in the notice and must admit,
deny, or state that the party lacks sufficient information to admit or
deny each allegation of fact. A statement of lack of information has the
effect of a denial. Denials must fairly meet the substance of each
allegation of fact denied; general denials are not permitted. When a
respondent denies part of an allegation, that part must be denied and
the remainder specifically admitted. Any allegation of fact in the
notice that is not denied in the answer is deemed admitted for purposes
of the proceeding. A respondent is not required to respond to the
portion of a notice that constitutes the prayer for relief or proposed
order. The answer shall set forth affirmative defenses, if any, asserted
by the respondent.
(c) Default. Failure of a respondent to file an answer required by
this section within the time provided constitutes a waiver of such
respondent's right to appear and contest the allegations in the notice.
If no timely answer is filed, the Finance Board's counsel of record may
file a motion for entry of an order of default. Upon a finding that no
good cause has been shown for the failure to file a timely answer, the
presiding officer shall file with the Board of Directors a recommended
decision containing the findings and the relief sought in the notice.
Any final order issued by the Board of Directors based upon a
respondent's failure to answer shall be deemed to be an order issued
upon consent.
Sec. 908.42 Amended pleadings.
(a) Amendments. The notice or answer may be amended or supplemented
by the Finance Board prior to the scheduling conference held in
accordance with Sec. 908.53, or at any stage of the proceeding with the
permission of the presiding officer for good cause shown. The respondent
must answer an amended notice within the time remaining for the
respondent's answer to the original notice, or within ten (10) days
after service of the amended notice, whichever period is longer, unless
the Board of Directors or the presiding officer orders otherwise for
good cause shown.
(b) Amendments to conform to the evidence. When issues not raised in
the notice or answer are tried at the hearing by express or implied
consent of the parties, they shall be treated in all respects as if they
had been raised in the notice or answer, and no formal amendments shall
be required. If evidence is objected to at the hearing on the ground
that it is not within the issues raised by the notice or answer, the
presiding officer may admit the evidence when admission is likely to
assist in adjudicating the merits of the action. The presiding officer
will do so freely when the determination of the merits of the action is
served thereby and the objecting party fails to satisfy the presiding
officer that the admission of such evidence would unfairly prejudice
that party's action or defense upon the merits. The presiding officer
may grant a continuance to enable the objecting party to meet such
evidence.
Sec. 908.43 Failure to appear.
Failure of a respondent to appear in person or by a duly authorized
representative at the hearing constitutes a waiver of respondent's right
to a hearing and is deemed an admission of the facts as alleged and
consent to the relief sought in the notice. Without further proceedings
or notice to the respondent, the presiding officer shall
[[Page 40]]
file with the Board of Directors a recommended decision containing the
findings and the relief sought in the notice.
Sec. 908.44 Consolidation and severance of actions.
(a) Consolidation. On the motion of any party, or on the Finance
Board's or the presiding officer's own motion, the presiding officer may
consolidate, for some or all purposes, any two or more proceedings, if
each such proceeding involves or arises out of the same transaction,
occurrence or series of transactions or occurrences, or involves at
least one common respondent or a material common question of law or
fact, unless such consolidation would cause unreasonable delay or
injustice. In the event of consolidation under this section, appropriate
adjustment to the pre-hearing schedule must be made to avoid unnecessary
expense, inconvenience, or delay.
(b) Severance. The presiding officer may, upon the motion of the
Finance Board or any party, sever the proceeding for separate resolution
of the matter as to any respondent only if the presiding officer finds
that undue prejudice or injustice to the moving party would result from
not severing the proceeding and such undue prejudice or injustice would
outweigh the interests of judicial economy and expedition in the
complete and final resolution of the proceeding.
Sec. 908.45 Motions.
(a) Written motions. (1) Except as otherwise provided herein, an
application or request for an order or ruling must be made by written
motion.
(2) All written motions shall state with particularity the relief
sought and must be accompanied by a proposed order.
(3) No oral argument may be held on written motions except as
otherwise directed by the presiding officer. Written memoranda, briefs,
affidavits, or other relevant material or documents may be filed in
support of or in opposition to a motion.
(b) Oral motions. A motion may be made orally and on the record at a
hearing, unless the presiding officer directs that such motion be
reduced to writing and filed with the presiding officer. Oral motions
must be made a part of the record of the hearing, and accompanied by a
proposed order.
(c) Filing of motions. Motions shall be filed with the presiding
officer, except that following the filing of a recommended decision with
the Board of Directors, motions must be filed with the Board of
Directors in accordance with Sec. 908.64.
(d) Responses. (1) Except as otherwise provided herein, any party
may file a written response to a motion within ten days after service of
any written motion, or within such other period of time as may be
established by the presiding officer or the Board of Directors. The
presiding officer shall not rule on any oral or written motion before
each party has had an opportunity to file a response.
(2) The failure of a party to oppose a written motion or an oral
motion made on the record is deemed to be consent by that party to the
entry of an order substantially in the form of the order accompanying
the motion.
(e) Dilatory motions. Frivolous, dilatory, or repetitive motions are
prohibited. The filing of such motions may form the basis for sanctions.
(f) Dispositive motions. Dispositive motions shall be governed by
Sec. Sec. 908.51 and 908.52.
Sec. 908.46 Discovery.
(a) Limits on discovery. Subject to the limitations set out in
paragraphs (b), (d), and (e) of this section, any party to a hearing
under this part may obtain document discovery by serving a written
request to produce documents. For purposes of a request to produce
documents, the term documents may be defined to include drawings,
graphs, charts, photographs, recordings, data stored in electronic form,
and other data compilations from which information can be obtained or
translated, if necessary, by the parties through detection devices into
reasonably usable form, as well as written material of all kinds.
(b) Relevance. A party may obtain document discovery regarding any
matter not privileged provided that the information sought has a logical
connection to consequential facts (i.e.,
[[Page 41]]
material) or may tend to prove or disprove a matter in issue (i.e.,
relevant) related to the merits of the pending action. Any request to
produce documents that calls for irrelevant or immaterial information,
or that is unreasonable, oppressive, excessive in scope, unduly
burdensome, or repetitive of previous requests, or that seeks to obtain
privileged documents, shall be denied or modified. A request is
unreasonable, oppressive, excessive in scope, or unduly burdensome if,
among other things, it fails to include justifiable limitations on the
time period covered and the geographic locations to be searched, the
time provided to respond in the request is inadequate, or the request
calls for copies of documents to be delivered to the requesting party
and fails to include the requestor's written agreement to pay in advance
for the copying, in accordance with Sec. 908.47.
(c) Forms of discovery. Document discovery shall be limited to
requests for production of documents for inspection and copying. No
other form of discovery shall be allowed. Discovery by use of
interrogatories may be permitted. This paragraph shall not be
interpreted to require the creation of a document.
(d) Privileged matter. Privileged documents shall not be
discoverable. Privileges include the attorney-client privilege, work-
product privilege, any government's or government agency's deliberative
process privilege and any other privileges provided by the Constitution,
any applicable act of Congress, or the principles of common law.
(e) Time limits. All discovery, including all responses to discovery
requests, shall be completed within the time set by the presiding
officer, but in no case later than ten (10) days prior to the service
deadline for pre-hearing submissions in accordance with Sec. 908.54. No
exception to this time limit shall be permitted, unless the presiding
officer finds on the record that good cause exists for waiving the
requirements of this paragraph.
Sec. 908.47 Request for document discovery from parties.
(a) General rule. Any party may serve on any other party a request
to produce for inspection any discoverable documents that are in the
possession, custody, or control of the party upon whom the request is
served. Copies of the request shall be served on all other parties. The
request must identify the documents to be produced either by individual
item or by category and must describe each item and category with
reasonable particularity. Documents must be produced as they are kept in
the usual course of business or they shall be labeled and organized to
correspond with the categories in the request.
(b) Production or copying. The request shall specify a reasonable
time, place and manner for production and performing any related acts.
In lieu of inspecting the documents, the requesting party may specify
that all or some of the responsive documents be copied and the copies
delivered to the requesting party. If copying of fewer than 250 pages is
requested, the party to whom the request is addressed shall bear the
cost of copying and shipping charges. If a party requests more than 250
pages of copying, the requesting party shall pay for copying and
shipping charges. Copying charges are at the current rate per page
imposed by the Finance Board at Sec. 910.9(g) of this chapter for
requests for documents filed under the Freedom of Information Act, 5
U.S.C. 552. The party to whom the request is addressed may require
payment in advance before producing the documents.
(c) Obligation to update responses. A party who has responded to a
discovery request is not required to supplement the response, unless:
(1) The responding party learns that in some material respect the
information disclosed is incomplete or incorrect, and
(2) The additional or corrective information has not otherwise been
made known to the other parties during the discovery process or in
writing.
(d) Motions to strike or limit discovery requests. (1) Any party
that objects to a discovery request may, within ten (10) days of being
served with such request, file a motion in accordance with the
provisions of Sec. 908.45 requesting the presiding officer order the
request be stricken or otherwise limited. If an objection is made to
only a portion of an
[[Page 42]]
item or category in a request, the objection shall specify that portion.
Any objections not made in accordance with this paragraph and Sec.
908.45 are waived.
(2) The party who served the request that is the subject of a motion
to strike or limit may file a written response within five (5) days of
service of the motion. No other party may file a response.
(e) Privilege. At the time other documents are produced, all
documents withheld on the grounds of privilege must be reasonably
identified, together with a statement of the basis for the assertion of
privilege. When similar documents that are protected by deliberative
process, attorney work-product, or attorney-client privilege are
voluminous, these documents may be identified by category instead of by
individual document. The presiding officer has discretion to determine
when the identification by category is insufficient.
(f) Motions to compel production. (1) If a party withholds any
documents as privileged or fails to comply fully with a discovery
request, the requesting party may, within (10) ten days of the assertion
of privilege or of the time the failure to comply becomes known to the
requesting party, file a motion in accordance with the provisions of
Sec. 908.45 for the issuance of a subpoena compelling production.
(2) The party who asserted the privilege or failed to comply with
the request may, within five (5) days of service of a motion for the
issuance of a subpoena compelling production, file a written response to
the motion. No other party may file a response.
(g) Ruling on motions. After the time for filing responses to
motions pursuant to this section has expired, the presiding officer
shall rule promptly on all such motions. If the presiding officer
determines that a discovery request or any of its terms calls for
irrelevant material, is unreasonable, oppressive, excessive in scope,
unduly burdensome, or repetitive of previous requests, or seeks to
obtain privileged documents, he or she may deny or modify the request
and may issue appropriate protective orders, upon such conditions as
justice may require. The pendency of a motion to strike or limit
discovery or to compel production shall not be a basis for staying or
continuing the proceeding, unless otherwise ordered by the presiding
officer. Notwithstanding any other provision in this part, the presiding
officer may not release, or order a party to produce, documents withheld
on grounds of privilege if the party has stated to the presiding officer
its intention to file a timely motion for interlocutory review of the
presiding officer's order to produce the documents, until the motion for
interlocutory review has been decided.
(h) Enforcing discovery subpoenas. If the presiding officer issues a
subpoena compelling production of documents by a party, the subpoenaing
party may, in the event of noncompliance and to the extent authorized by
applicable law, apply to any appropriate United States district court
for an order requiring compliance with the subpoena. A party's right to
seek court enforcement of a subpoena shall not in any manner limit the
sanctions that may be imposed by the presiding officer against a party
who fails to produce or induces another to fail to produce subpoenaed
documents.
Sec. 908.48 Document subpoenas to nonparties.
(a) General rules. (1) Any party may apply to the presiding officer
for the issuance of a document discovery subpoena addressed to any
person who is not a party to the proceeding. The application must
contain a proposed document subpoena and a brief statement showing the
general relevance and reasonableness of the scope of documents sought.
The subpoenaing party shall specify a reasonable time, place, and manner
for production in response to the subpoena.
(2) A party shall only apply for a document subpoena under this
section within the time period during which such party could serve a
discovery request under Sec. 908.46(e) and in accordance with Sec.
908.47. The party requesting the document subpoena is responsible for
serving it on the subpoenaed person and for serving copies on all
parties. Document subpoenas may be served in any State, territory, or
possession of
[[Page 43]]
the United States, the District of Columbia, or as otherwise provided by
law.
(3) The presiding officer shall promptly issue any document subpoena
applied for under this section; except that, if the presiding officer
determines that the application does not set forth a valid basis for the
issuance of the subpoena, or that any of its terms are unreasonable,
oppressive, excessive in scope, or unduly burdensome, he may refuse to
issue the subpoena or may issue it in a modified form upon such
conditions as may be determined by the presiding officer.
(b) Motion to quash or modify. (1) Any person to whom a document
subpoena is directed may file a motion to quash or modify such subpoena,
accompanied by a statement of the basis for quashing or modifying the
subpoena. The movant shall serve the motion on all parties and any party
may respond to such motion within ten days of service of the motion.
(2) Any motion to quash or modify a document subpoena shall be filed
on the same basis, including the assertion of privilege, upon which a
party could object to a discovery request under Sec. 908.47 and during
the same time limits during which such an objection could be filed.
(c) Enforcing document subpoenas. If a subpoenaed person fails to
comply with any subpoena issued pursuant to this section or any order of
the presiding officer that directs compliance with all or any portion of
a document subpoena, the subpoenaing party or any other aggrieved party
may, to the extent authorized by applicable law, apply to an appropriate
United States district court for an order requiring compliance with any
part of the subpoena that the presiding officer has not quashed or
modified. A party's right to seek court enforcement of a document
subpoena shall in no way limit the sanctions that may be imposed by the
presiding officer on a party who induces a failure to comply with
subpoenas issued under this section.
Sec. 908.49 Deposition of witness unavailable for hearing.
(a) General rules. (1) A party desiring to preserve that witness'
testimony for the record may apply in accordance with the procedures set
forth in paragraph (a)(2) of this section to the presiding officer for
the issuance of a subpoena, including a subpoena duces tecum, requiring
the attendance of the witness at a deposition. The presiding officer may
issue a deposition subpoena under this section upon a showing that--
(i) The testimony is reasonably expected to be material; and
(ii) Taking the deposition will not result in any undue burden to
any other party and will not cause undue delay of the proceeding.
(2) The application must contain a proposed deposition subpoena and
a brief statement of the reasons for the issuance of the subpoena. The
subpoena must name the witness whose deposition is to be taken and
specify the time and place for taking the deposition. A deposition
subpoena may require the witness to be deposed anywhere within the
United States and its possessions and territories in which that witness
resides or has a regular place of employment or such other convenient
place as the presiding officer shall fix.
(3) A subpoena shall be promptly issued upon request, unless the
presiding officer determines that the request fails to set forth a valid
basis under this section for its issuance. The presiding officer shall
make a determination that there is a valid basis for issuing the
subpoena. The presiding officer may require a written response from the
party requesting the subpoena or require attendance at a conference to
determine whether there is a valid basis upon which to issue the
requested subpoena.
(4) The party obtaining a deposition subpoena is responsible for
serving it on the witness and for serving copies on all parties. Unless
the presiding officer orders otherwise, no deposition under this section
shall be taken on fewer than ten (10) days' notice to the witness and
all parties. Deposition subpoenas may be served anywhere within the
United States or its possessions or territories on any person doing
business anywhere within the United States or its possessions or
territories, or as otherwise permitted by law.
[[Page 44]]
(b) Objections to deposition subpoenas. (1) The witness and any
party who has not had an opportunity to oppose a deposition subpoena
issued under this section may file a motion under Sec. 908.45 with the
presiding officer to quash or modify the subpoena prior to the time for
compliance specified in the subpoena, but not more than ten (10) days
after service of the subpoena.
(2) A statement of the basis for the motion to quash or modify a
subpoena issued under this section shall accompany the motion. The
motion must be served on all parties.
(c) Procedure upon deposition. (1) Each witness testifying pursuant
to a deposition subpoena shall be duly sworn and each party shall have
the right to examine the witness. Objections to questions or documents
must be in short form, stating the grounds for the objection. Failure to
object to questions or documents is not deemed a waiver except where the
ground for objection might have been avoided if the objection had been
presented timely. All questions, answers and objections must be
recorded.
(2) Any party may move before the presiding officer for an order
compelling the witness to answer any questions the witness has refused
to answer or submit any evidence that, during the deposition, the
witness has refused to submit.
(3) The deposition shall be subscribed by the witness, unless the
parties and the witness, by stipulation, have waived the signing, or the
witness is ill, cannot be found, or has refused to sign. If the
deposition is not subscribed by the witness, the court reporter taking
the deposition shall certify that the transcript is a true and complete
transcript of the deposition.
(d) Enforcing subpoenas. If a subpoenaed person fails to comply with
any subpoena issued pursuant to this section or with any order of the
presiding officer made upon motion under paragraph (c)(2) of this
section, the subpoenaing party or other aggrieved party may, to the
extent authorized by applicable law, apply to an appropriate United
States district court for an order requiring compliance with the
portions of the subpoena that the presiding officer has ordered
enforced. A party's right to seek court enforcement of a deposition
subpoena in no way limits the sanctions that may be imposed by the
presiding officer on a party who fails to comply with or induces a
failure to comply with a subpoena issued under this section.
Sec. 908.50 Interlocutory review.
(a) General rule. The Board of Directors may review a ruling of the
presiding officer prior to the certification of the record to the Board
of Directors only in accordance with the procedures set forth in this
section.
(b) Procedure. Any motion for interlocutory review shall be filed by
a party with the presiding officer within ten (10) days of his ruling.
Upon the expiration of the time for filing all responses, the presiding
officer shall refer the matter to the Board of Directors for final
disposition. In referring the matter to the Board of Directors, the
presiding officer may indicate agreement or disagreement with the
asserted grounds for interlocutory review of the ruling in question.
(c) Scope of review. The Board of Directors may exercise
interlocutory review of a ruling of the presiding officer if it finds
that--
(1) The ruling involves a controlling question of law or policy as
to which substantial grounds exist for a difference of opinion;
(2) Immediate review of the ruling may materially advance the
ultimate termination of the proceeding;
(3) Subsequent modification of the ruling at the conclusion of the
proceeding would be an inadequate remedy; or
(4) Subsequent modification of the ruling would cause unusual delay
or expense.
(d) Suspension of proceeding. Neither a request for interlocutory
review nor any disposition of such a request by the Board of Directors
under this section suspends or stays the proceeding unless otherwise
ordered by the presiding officer or the Board of Directors.
Sec. 908.51 Summary disposition.
(a) In general. The presiding officer shall recommend that the Board
of Directors issue a final order granting a motion for summary
disposition if the
[[Page 45]]
undisputed pleaded facts, admissions, affidavits, stipulations,
documentary evidence, matters as to which official notice may be taken
and any other evidentiary materials properly submitted in connection
with a motion for summary disposition show that--
(1) There is no genuine issue as to any material fact; and
(2) The movant is entitled to a decision in its favor as a matter of
law.
(b) Filing of motions and responses. (1) Any party who believes
there is no genuine issue of material fact to be determined and that
such party is entitled to a decision as a matter of law may move at any
time for summary disposition in its favor of all or any part of the
proceeding. Any party, within twenty (20) days after service of such
motion or within such time period as allowed by the presiding officer,
may file a response to such motion.
(2) A motion for summary disposition must be accompanied by a
statement of material facts as to which the movant contends there is no
genuine issue. Such motion must be supported by documentary evidence,
which may take the form of admissions in pleadings, stipulations,
written interrogatory responses, depositions, investigatory depositions,
transcripts, affidavits and any other evidentiary materials that the
movant contends support its position. The motion must also be
accompanied by a brief containing the points and authorities in support
of the contention of the movant. Any party opposing a motion for summary
disposition must file a statement setting forth those material facts as
to which such party contends a genuine dispute exists. Such opposition
must be supported by evidence of the same type as that submitted with
the motion for summary disposition and a brief containing the points and
authorities in support of the contention that summary disposition would
be inappropriate.
(c) Hearing on motion. At the request of any party or on his own
motion, the presiding officer may hear oral argument on the motion for
summary disposition.
(d) Decision on motion. Following receipt of a motion for summary
disposition and all responses thereto, the presiding officer shall
determine whether the movant is entitled to summary disposition. If the
presiding officer finds that the moving party is not entitled to summary
disposition, the presiding officer shall make a ruling denying the
motion. If the presiding officer determines that summary disposition is
warranted, the presiding officer shall submit a recommended decision to
that effect to the Board of Directors under Sec. 908.63.
Sec. 908.52 Partial summary disposition.
If the presiding officer determines that a party is entitled to
summary disposition as to certain claims only, he or she shall defer
submitting a recommended decision to the Board of Directors as to those
claims. A hearing on the remaining issues must be ordered. Those claims
for which the presiding officer has determined that summary disposition
is warranted will be addressed in the recommended decision filed at the
conclusion of the hearing.
Sec. 908.53 Scheduling and prehearing conferences.
(a) Scheduling conference. Within thirty (30) days of service of the
notice or order commencing a proceeding or at such other time as the
parties may agree, the presiding officer shall direct representatives
for all parties to meet with him or her in person at a specified time
and place prior to the hearing or to confer by telephone for the purpose
of scheduling the course and conduct of the proceeding. This meeting or
telephone conference is called a ``scheduling conference.'' The
identification of potential witnesses, the time for and manner of
discovery and the exchange of any pre-hearing materials including
witness lists, statements of issues, stipulations, exhibits and any
other materials may also be determined at the scheduling conference.
(b) Pre-hearing conference. The presiding officer may, in addition
to the scheduling conference, on his own motion or at the request of any
party, direct representatives for the parties to meet with him (in
person or by telephone) at a pre-hearing conference to address any or
all of the following:
(1) Simplification and clarification of the issues;
[[Page 46]]
(2) Stipulations, admissions of fact and the contents, authenticity
and admissibility into evidence of documents;
(3) Matters of which official notice may be taken;
(4) Limitation of the number of witnesses;
(5) Summary disposition of any or all issues;
(6) Resolution of discovery issues or disputes;
(7) Amendments to pleadings; and
(8) Such other matters as may aid in the orderly disposition of the
proceeding.
(c) Transcript. The presiding officer, in his discretion, may
require that a scheduling or prehearing conference be recorded by a
court reporter. A transcript of the conference and any materials filed,
including orders, becomes part of the record of the proceeding. A party
may obtain a copy of the transcript at such party's expense.
(d) Scheduling or pre-hearing orders. Within a reasonable time
following the conclusion of the scheduling conference or any pre-hearing
conference, the presiding officer shall serve on each party an order
setting forth any agreements reached and any procedural determinations.
Sec. 908.54 Pre-hearing submissions.
(a) Service deadline. Within the time set by the presiding officer,
but in no case later than 10 (ten) days before the start of the hearing,
each party shall serve on every other party the serving party's:
(1) Pre-hearing statement;
(2) Final list of witnesses to be called to testify at the hearing,
including name and address of each witness and a short summary of the
expected testimony of each witness;
(3) List of the exhibits to be introduced at the hearing along with
a copy of each exhibit; and
(4) Stipulations of fact, if any.
(b) Effect of failure to comply. No witness may testify and no
exhibits may be introduced at the hearing if such witness or exhibit is
not listed in the pre-hearing submissions pursuant to paragraph (a) of
this section, except for good cause shown.
Sec. 908.55 Hearing subpoenas.
(a) Issuance. (1) Upon application of a party showing general
materiality or relevance and reasonableness of scope of the testimony or
other evidence sought, the presiding officer may issue a subpoena or a
subpoena duces tecum requiring the attendance of a witness at the
hearing or the production of documentary or physical evidence at such
hearing. The application for a hearing subpoena must also contain a
proposed subpoena specifying the attendance of a witness or the
production of evidence from any State, commonwealth, possession,
territory of the United States, or the District of Columbia, or as
otherwise provided by law at any designated place where the hearing is
being conducted. The party making the application shall serve a copy of
the application and the proposed subpoena on every other party.
(2) A party may apply for a hearing subpoena at any time before the
commencement of or during a hearing. During a hearing, a party may make
an application for a subpoena orally on the record before the presiding
officer.
(3) The presiding officer shall promptly issue any hearing subpoena
applied for under this section; except that, if the presiding officer
determines that the application does not set forth a valid basis for the
issuance of the subpoena, or that any of its terms are unreasonable,
oppressive, excessive in scope, or unduly burdensome, he may refuse to
issue the subpoena or may issue the subpoena in a modified form upon any
conditions consistent with this subpart. Upon issuance by the presiding
officer, the party making the application shall serve the subpoena on
the person named in the subpoena and on each party.
(b) Motion to quash or modify. (1) Any person to whom a hearing
subpoena is directed or any party may file a motion to quash or modify
such subpoena, accompanied by a statement of the basis for quashing or
modifying the subpoena. The movant must serve the motion on each party
and on the person named in the subpoena. Any party may respond to the
motion within ten days of service of the motion.
(2) Any motion to quash or modify a hearing subpoena must be filed
prior to
[[Page 47]]
the time specified in the subpoena for compliance, but no more than ten
days after the date of service of the subpoena upon the movant.
(c) Enforcing subpoenas. If a subpoenaed person fails to comply with
any subpoena issued pursuant to this section or any order of the
presiding officer that directs compliance with all or any portion of a
hearing subpoena, the subpoenaing party or any other aggrieved party may
seek enforcement of the subpoena pursuant to Sec. 908.8(c). A party's
right to seek court enforcement of a hearing subpoena shall in no way
limit the sanctions that may be imposed by the presiding officer on a
party who fails, or induces a failure, to comply with any subpoena
issued under this section.
Sec. Sec. 908.56-908.59 [Reserved]
Subpart E_Hearing and Post-hearing Proceedings
Sec. 908.60 Conduct of hearings.
(a) General rules--(1) Hearings. Hearings shall be conducted in
accordance with chapter 5 of Title 5 of the United States Code (5 U.S.C.
501-559) and other applicable law, so as to provide a fair and
expeditious presentation of the relevant disputed issues. Except as
limited by this subpart, each party has the right to present its case or
defense by oral and documentary evidence and to conduct such cross-
examination of witnesses as may be required for full disclosure of the
facts.
(2) Order of hearing. The Finance Board shall present its case-in-
chief first, unless otherwise ordered by the presiding officer or unless
otherwise expressly specified by law or regulation. The Finance Board
shall be the first party to present an opening statement and a closing
statement and may make a rebuttal statement after the respondent's
closing statement. If there are multiple respondents, respondents may
agree among themselves as to their order or presentation of their cases,
but if they do not agree, the presiding officer shall fix the order.
(3) Examination of witnesses. Only one representative for each party
may conduct an examination of a witness, except that in the case of
extensive direct examination, the presiding officer may permit more than
one representative for the party presenting the witness to conduct the
examination. A party may have one representative conduct the direct
examination and another representative conduct re-direct examination of
a witness, or may have one representative conduct the cross examination
of a witness and another representative conduct the re-cross examination
of a witness.
(4) Stipulations. Unless the presiding officer directs otherwise,
all documents that the parties have stipulated as admissible shall be
admitted into evidence upon commencement of the hearing.
(b) Transcript. The hearing shall be recorded and transcribed. The
transcript shall be made available to any party upon payment of the cost
thereof. The presiding officer shall have authority to order the record
corrected, either upon motion to correct, upon stipulation of the
parties, or following notice to the parties upon the presiding officer's
own motion.
Sec. 908.61 Evidence.
(a) Admissibility. (1) Except as is otherwise set forth in this
section, relevant, material and reliable evidence that is not unduly
repetitive is admissible to the fullest extent authorized by the
Administrative Procedure Act (5 U.S.C. 551-559) and other applicable
law.
(2) Evidence that would be admissible under the Federal Rules of
Evidence (see generally, 28 U.S.C.) is admissible in a proceeding
conducted pursuant to this subpart.
(3) The presiding officer may admit evidence, which otherwise would
be inadmissible under the Federal Rules of Evidence (28 U.S.C.), upon a
finding made on the record that the evidence is relevant, material,
probative and reliable, and would not prejudice the rights of or cause
an undue burden to any party to the proceeding.
(b) Official notice. (1) Official notice may be taken of any
material fact that may be judicially noticed by a United States district
court and any material information in the official public records of any
Federal or State government agency.
[[Page 48]]
(2) All matters officially noticed by the presiding officer or the
Finance Board shall appear on the record.
(3) If official notice is requested of any material fact, the
parties, upon timely request, shall be afforded an opportunity to
object.
(c) Documents. (1) A duplicate copy of a document is admissible to
the same extent as the original, unless a genuine issue is raised as to
whether the copy is in some material respect not a true and legible copy
of the original.
(2) Subject to the requirements of paragraph (a)(1) of this section,
any document, including a report of examination, oversight activity,
inspection, or visitation, prepared by the Finance Board or by another
Federal or State financial institutions regulatory agency is admissible
either with or without a sponsoring witness.
(3) Witnesses may use existing or newly created charts, exhibits,
calendars, calculations, outlines, or other graphic material to
summarize, illustrate, or simplify the presentation of testimony. Such
materials may, subject to the presiding officer's discretion, be used
with or without being admitted into evidence.
(d) Objections. (1) Objections to the admissibility of evidence must
be timely made and rulings on all objections must appear in the record.
(2) When an objection to a question or line of questioning is
sustained, the examining representative of record may make a specific
proffer on the record of what he expected to prove by the expected
testimony of the witness. The proffer may be by representation of the
representative or by direct interrogation of the witness.
(3) The presiding officer shall retain rejected exhibits, adequately
marked for identification, for the record and transmit such exhibits to
the Board of Directors.
(4) Failure to object to admission of evidence or to any evidentiary
ruling constitutes a waiver of the objection.
(e) Stipulations. The parties may stipulate as to any relevant
matters of fact or the authentication of any relevant documents. Such
stipulations must be received in evidence at a hearing and are binding
on the parties with respect to the matters therein stipulated.
(f) Depositions of unavailable witnesses. (1) If a witness is
unavailable to testify at a hearing and that witness has testified in a
deposition in accordance with Sec. 908.49, a party may offer as
evidence all or any part of the transcript of the deposition, including
deposition exhibits, if any.
(2) Such deposition transcript is admissible to the same extent that
testimony would have been admissible had that person testified at the
hearing, provided that if a witness refused to answer proper questions
during the depositions, the presiding officer may, on that basis, limit
the admissibility of the deposition in any manner that justice requires.
(3) Only those portions of a deposition received in evidence at the
hearing constitute a part of the record.
[67 FR 9903, Mar. 5, 2002; 67 FR 34990, May 16, 2002]
Sec. 908.62 Post-hearing filings.
(a) Proposed findings and conclusions and supporting briefs. (1)
Using the same method of service for each party, the presiding officer
shall serve notice upon each party that the certified transcript,
together with all hearing exhibits and exhibits introduced but not
admitted into evidence at the hearing, has been filed. Any party may
file with the presiding officer proposed findings of fact, proposed
conclusions of law and a proposed order within thirty (30) days after
the parties have received notice that the transcript has been filed with
the presiding officer, unless otherwise ordered by the presiding
officer.
(2) Proposed findings and conclusions must be supported by citation
to any relevant authorities and by page references to any relevant
portions of the record. A post-hearing brief may be filed in support of
proposed findings and conclusions, either as part of the same document
or in a separate document.
(3) Any party is deemed to have waived any issue not raised in
proposed findings or conclusions timely filed by that party.
(b) Reply briefs. Reply briefs may be filed within fifteen (15) days
after the date on which the parties' proposed findings and conclusions
and proposed
[[Page 49]]
order are due. Reply briefs must be limited strictly to responding to
new matters, issues, or arguments raised in another party's papers. A
party who has not filed proposed findings of fact and conclusions of law
or a post-hearing brief shall not file a reply brief.
(c) Simultaneous filing required. The presiding officer shall not
order the filing by any party of any brief or reply brief supporting
proposed findings and conclusions in advance of the other party's filing
of its brief.
Sec. 908.63 Recommended decision and filing of record.
(a) Filing of recommended decision and record. Within forty-five
(45) days after expiration of the time allowed for filing reply briefs
under Sec. 908.62(b), the presiding officer shall file with and certify
to the Board of Directors, for decision, the record of the proceeding.
The record must include the presiding officer's recommended decision,
recommended findings of fact and conclusions of law, and proposed order;
all pre-hearing and hearing transcripts, exhibits and rulings; and the
motions, briefs, memoranda and other supporting papers filed in
connection with the hearing. The presiding officer shall serve upon each
party the recommended decision, recommended findings and conclusions,
and proposed order.
(b) Filing of index. At the same time the presiding officer files
with and certifies to the Board of Directors, for final determination,
the record of the proceeding, the presiding officer shall furnish to the
Board of Directors a certified index of the entire record of the
proceeding. The certified index shall include, at a minimum, an entry
for each paper, document or motion filed with the presiding officer in
the proceeding, the date of the filing, and the identity of the filer.
The certified index shall also include an exhibit index containing, at a
minimum, an entry consisting of exhibit number and title or description
for each exhibit introduced and admitted into evidence at the hearing;
each exhibit introduced but not admitted into evidence at the hearing;
each exhibit introduced and admitted into evidence after the completion
of the hearing; and each exhibit introduced but not admitted into
evidence after the completion of the hearing.
Sec. 908.64 Exceptions to recommended decision.
(a) Filing exceptions. Within thirty (30) days after service of the
recommended decision, recommended findings and conclusions, and proposed
order under Sec. 908.63, a party may file with the Finance Board
written exceptions to the presiding officer's recommended decision,
recommended findings and conclusions, or proposed order; to the
admission or exclusion of evidence; or to the failure of the presiding
officer to make a ruling proposed by a party. A supporting brief may be
filed at the time the exceptions are filed, either as part of the same
document or in a separate document.
(b) Effect of failure to file or raise exceptions. (1) Failure of a
party to file exceptions to those matters specified in paragraph (a) of
this section within the time prescribed is deemed a waiver of objection
thereto.
(2) No exception need be considered by the Board of Directors if the
party taking exception had an opportunity to raise the same objection,
issue, or argument before the presiding officer and failed to do so.
(c) Contents. (1) All exceptions and briefs in support of such
exceptions must be confined to the particular matters in or omissions
from the presiding officer's recommendations to which that party takes
exception.
(2) All exceptions and briefs in support of exceptions must set
forth page or paragraph references to the specific parts of the
presiding officer's recommendations to which exception is taken, the
page or paragraph references to those portions of the record relied upon
to support each exception and the legal authority relied upon to support
each exception. Exceptions and briefs in support shall not exceed a
total of 30 pages, except by leave of the Finance Board on motion.
(3) Each party may submit one reply brief within ten (10) days of
service of exceptions and briefs in support of exceptions. Reply briefs
shall not exceed 15 pages, except by leave of the Finance Board on
motion.
[[Page 50]]
Sec. 908.65 Review by Board of Directors.
(a) Notice of submission to the Board of Directors. When the Board
of Directors determines that the record in the proceeding is complete,
the Finance Board shall serve notice upon the parties that the
proceeding has been submitted to the Board of Directors for final
decision and order in accordance with this section.
(b) Oral argument before the Board of Directors. Upon the initiative
of the Board of Directors or on the written request of any party filed
with the Board of Directors within the time for filing exceptions under
Sec. 908.64, the Board of Directors may order and hear oral argument on
the recommended findings, conclusions, decision and order of the
presiding officer. A written request by a party must show good cause for
oral argument and state reasons why arguments cannot be presented
adequately in writing. A denial of a request for oral argument may be
set forth in the Board of Directors' final decision and order. Oral
argument before the Board of Directors must be transcribed.
(c) Board of Directors' final decision and order. (1) Decisional
employees may advise and assist the Board of Directors in the
consideration and disposition of the case, and in the preparation of the
final decision and order. The final decision and order of the Board of
Directors will be based upon review of the entire record of the
proceeding, except that the Board of Directors may limit the issues to
be reviewed to those findings and conclusions to which opposing
arguments or exceptions have been filed by the parties in accordance
with this part.
(2) The Board of Directors shall render and issue a final decision
and order within ninety (90) days after notification of the parties that
the case has been submitted to the Board of Directors, unless the Board
of Directors orders that the action or any aspect thereof be remanded to
the presiding officer for further proceedings in accordance with
instructions as may be specified by the Board of Directors. Copies of
the final decision and order of the Board of Directors shall be served
upon each party to the proceeding and otherwise, as may be required by
the Board of Directors in accordance with applicable law.
Sec. 908.66 Exhaustion of administrative remedies.
To exhaust administrative remedies as to any issue on which a party
disagrees with the presiding officer's recommendations, a party must
file exceptions with the Board of Directors under Sec. 908.64. A party
must exhaust administrative remedies as a precondition to seeking
judicial review of any final decision and order, in whole or in part,
issued by the Board of Directors under Sec. 908.65.
Sec. 908.67 Stay of final decision and order pending judicial review.
The commencement of proceedings for judicial review of all or part
of a final order issued by the Board of Directors in accordance with
Sec. 908.65, as provided in Sec. 908.10 may not, unless specifically
ordered by the Board of Directors or a reviewing court, operate as a
stay of any order issued by the Board of Directors. The Board of
Directors may, in its discretion and on such terms as it finds just,
stay the effectiveness of all or any part of an order of the Board of
Directors pending a final decision on a petition for judicial review of
that order.
Sec. Sec. 908.68-908.69 [Reserved]
Subpart F_Rules of Practice Before the Finance Board
Sec. 908.70 Scope.
This subpart contains rules governing practice by parties or their
representatives in any proceeding before the Finance Board. In
particular, these rules of practice shall apply to any appearances
before the Board of Directors under this part or part 907 of this
chapter. This subpart also shall govern the imposition of sanctions by
the Finance Board or a presiding officer against parties or their
representatives in a hearing under this part or a proceeding under part
907 of this chapter. In the sole discretion of the Finance Board,
Sec. Sec. 908.74 and 908.75 may be applied to persons who appear in a
representational capacity in any hearing under this part or any
proceeding under part
[[Page 51]]
907 of this chapter, or in any other matter that involves contacting the
Finance Board as a principal or agent with respect to asserting the
rights, privileges, or liabilities of an individual or entity, including
presentations to or communications with the Board of Directors or any
member of the Board of Directors. This representation includes, but is
not limited to, the practice of attorneys and accountants. Employees of
the Finance Board are not subject to disciplinary proceedings under this
subpart.
Sec. 908.71 Practice before the Finance Board.
Practice before the Finance Board for the purposes of this subpart,
includes, but is not limited to, transacting any business with the
Finance Board as counsel, representative or agent for any other person,
unless the Finance Board orders otherwise. Practice before the Finance
Board also includes the preparation of any statement, opinion, or other
paper by a counsel, representative or agent that is filed with the
Finance Board in any request, certification, notification, application,
report, or other document, with the consent of such counsel,
representative or agent. Practice before the Finance Board does not
include work prepared for a Bank solely at the request of the Bank for
use in the ordinary course of its business.
Sec. 908.72 Appearances and practice in proceedings before the Finance
Board.
(a) Appearances in proceedings before the Finance Board--(1) By
attorneys. A party may be represented by an attorney who is a member in
good standing of the bar of the highest court of any State,
commonwealth, possession, territory of the United States, or the
District of Columbia and who is not currently suspended or disbarred
from practice before the Finance Board.
(2) By non-attorneys. An individual may appear on his own behalf. A
member of a partnership may represent the partnership and a duly
authorized officer, board of director member, employee, or other agent
of any corporation or other entity not specifically listed herein may
represent such corporation or other entity; provided that such officer,
board of director member, employee, or other agent is not currently
suspended or disbarred from practice before the Finance Board. A duly
authorized officer or employee of any Government unit, agency, or
authority may represent that unit, agency, or authority.
(b) Notice of appearance. Any person appearing in a representative
capacity on behalf of a party, including the Finance Board, shall
execute and file a notice of appearance with the presiding officer at or
before the time such person submits papers or otherwise appears on
behalf of a party in a hearing under this part. Such notice of
appearance shall include a written declaration that the individual is
currently qualified as provided in paragraphs (a)(1) or (a)(2) of this
section and is authorized to represent the particular party. By filing a
notice of appearance on behalf of a party in a hearing under this part,
the representative thereby agrees and represents that he is authorized
to accept service on behalf of the represented party and that, in the
event of withdrawal from representation, he or she will, if required by
the presiding officer, continue to accept service until a new
representative has filed a notice of appearance or until the represented
party indicates that he or she will proceed on a pro se basis. Unless
the representative filing the notice is an attorney, the notice of
appearance shall also be executed by the person represented or, if the
person is not an individual, by the chief executive officer, or duly
authorized officer of that person.
Sec. 908.73 Conflicts of interest.
(a) Conflict of interest in representation. No representative shall
represent another person in an adjudicatory proceeding if it reasonably
appears that such representation may be limited materially by that
representative's responsibilities to a third person or by that
representative's own interests. The presiding officer may take
corrective measures at any stage of a proceeding to cure a conflict of
interest in representation, including the issuance
[[Page 52]]
of an order limiting the scope of representation or disqualifying an
individual from appearing in a representative capacity for the duration
of the proceeding.
(b) Certification and waiver. If any person appearing as counsel or
other representative represents two or more parties in a proceeding
under this part or also represents a nonparty on a matter relevant to an
issue in the proceeding, that representative must certify in writing at
the time of filing the notice of appearance required by Sec. 908.72:
(1) That the representative has personally and fully discussed the
possibility of conflicts of interest with each such party and nonparty;
(2) That each such party and nonparty waives any right it might
otherwise have had to assert any known conflicts of interest or to
assert any non-material conflicts of interest during the course of the
proceeding.
Sec. 908.74 Sanctions.
(a) General rule. Appropriate sanctions may be imposed during the
course of any proceeding when any party or representative of record has
acted or failed to act in a manner required by applicable statute,
regulation, or order, and that act or failure to act--
(1) Constitutes contemptuous conduct. Contemptuous conduct includes
dilatory, obstructionist, egregious, contumacious, unethical, or other
improper conduct at any phase of any proceeding, hearing, or appearance
before the Board of Directors;
(2) Has caused some other party material and substantive injury,
including, but not limited to, incurring expenses including attorney's
fees or experiencing prejudicial delay;
(3) Is a clear and unexcused violation of an applicable statute,
regulation, or order; or
(4) Has delayed the proceeding unduly.
(b) Sanctions. Sanctions that may be imposed include, but are not
limited to, any one or more of the following:
(1) Issuing an order against a party;
(2) Rejecting or striking any testimony or documentary evidence
offered, or other papers filed, by the party;
(3) Precluding the party from contesting specific issues or
findings;
(4) Precluding the party from offering certain evidence or from
challenging or contesting certain evidence offered by another party;
(5) Precluding the party from making a late filing or conditioning a
late filing on any terms that may be just; or
(6) Assessing reasonable expenses, including attorney's fees,
incurred by any other party as a result of the improper action or
failure to act.
(c) Procedure for imposition of sanctions. (1) The presiding
officer, on the motion of any party, or on his own motion, and after
such notice and responses as may be directed by the presiding officer,
may impose any sanction authorized by this section. The presiding
officer shall submit to the Board of Directors for final ruling any
sanction that would result in a final order that terminates the case on
the merits or is otherwise dispositive of the case.
(2) Except as provided in paragraph (d) of this section, no sanction
authorized by this section, other than refusing to accept late papers,
shall be imposed without prior notice to all parties and an opportunity
for any representative or party against whom sanctions would be imposed
to be heard. The presiding officer shall determine and direct the
appropriate notice and form for such opportunity to be heard. The
opportunity to be heard may be limited to an opportunity to respond
verbally immediately after the act or inaction in question is noted by
the presiding officer.
(3) For purposes of interlocutory review, motions for the imposition
of sanctions by any party and the imposition of sanctions shall be
treated the same as motions for any other ruling by the presiding
officer.
(4) Nothing in this section shall be read to preclude the presiding
officer or the Finance Board from taking any other action or imposing
any other restriction or sanction authorized by any applicable statute
or regulation.
(d) Sanctions for contemptuous conduct. If, during the course of any
proceeding, a presiding officer finds any representative or any
individual representing
[[Page 53]]
himself to have engaged in contemptuous conduct, the presiding officer
may summarily suspend that individual from participating in that or any
related proceeding or impose any other appropriate sanction.
Sec. 908.75 Censure, suspension, disbarment and reinstatement.
(a) Discretionary censure, suspension and disbarment. (1) The
Finance Board may censure any individual who practices or attempts to
practice before it or suspend or revoke the privilege to appear or
practice before the Finance Board of such individual if, after notice of
and opportunity for a hearing in the matter, that individual is found by
the Finance Board--
(i) Not to possess the requisite qualifications or competence to
represent others;
(ii) To be seriously lacking in character or integrity or to have
engaged in material unethical or improper professional conduct;
(iii) To have caused unfair and material injury or prejudice to
another party, such as prejudicial delay or unnecessary expenses
including attorney's fees;
(iv) To have engaged in, or aided and abetted, a material and
knowing violation of the Act or the rules or regulations issued under
the Act or any other law or regulation governing Bank operations;
(v) To have engaged in contemptuous conduct before the Finance
Board;
(vi) With intent to defraud in any manner, to have willfully and
knowingly deceived, misled, or threatened any client or prospective
client; or
(vii) Within the last ten years, to have been convicted of an
offense involving moral turpitude, dishonesty or breach of trust, if the
conviction has not been reversed on appeal. A conviction within the
meaning of this paragraph shall be deemed to have occurred when the
convicting court enters its judgment or order, regardless of whether an
appeal is pending or could be taken and includes a judgment or an order
on a plea of nolo contendere or on consent, regardless of whether a
violation is admitted in the consent.
(2) Suspension or revocation on the grounds set forth in paragraphs
(a)(1) (ii), (iii), (iv), (v), (vi) and (vii) of this section shall only
be ordered upon a further finding that the individual's conduct or
character was sufficiently egregious as to justify suspension or
revocation. Suspension or disbarment under this paragraph shall continue
until the applicant has been reinstated by the Finance Board for good
cause shown or until, in the case of a suspension, the suspension period
has expired.
(3) If the final order against the respondent is for censure, the
individual may be permitted to practice before the Finance Board, but
such individual's future representations may be subject to conditions
designed to promote high standards of conduct. If a written letter of
censure is issued, a copy will be maintained in the Finance Board's
files.
(b) Mandatory suspension and disbarment. (1) Any counsel who has
been and remains suspended or disbarred by a court of the United States
or of any State, commonwealth, possession, territory of the United
States or the District of Columbia; any accountant or other licensed
expert whose license to practice has been revoked in any State,
commonwealth, possession, territory of the United States or the District
of Columbia; any person who has been and remains suspended or barred
from practice before the Department of Housing and Urban Development,
the Office of the Comptroller of the Currency, the Board of Governors of
the Federal Reserve System, the Office of Thrift Supervision, the
Federal Deposit Insurance Corporation, the National Credit Union
Administration, the Office of Federal Housing Enterprise Oversight, the
Farm Credit Administration, the Securities and Exchange Commission, or
the Commodity Futures Trading Commission is also suspended automatically
from appearing or practicing before the Finance Board. A disbarment or
suspension within the meaning of this paragraph shall be deemed to have
occurred when the disbarring or suspending agency or tribunal enters its
judgment or order, regardless of whether an appeal is pending or could
be taken and regardless of whether a violation is admitted in the
consent.
(2) A suspension or disbarment from practice before the Finance
Board
[[Page 54]]
under paragraph (b)(1) of this section shall continue until the person
suspended or disbarred is reinstated under paragraph (d)(2) of this
section.
(c) Notices to be filed. (1) Any individual appearing or practicing
before Finance Board who is the subject of an order, judgment, decree,
or finding of the types set forth in paragraph (b)(1) of this section
shall file promptly with the Finance Board a copy thereof, together with
any related opinion or statement of the agency or tribunal involved.
(2) Any individual appearing or practicing before the Finance Board
who is or within the last ten years has been convicted of a felony or of
a misdemeanor that resulted in a sentence of prison term or in a fine or
restitution order totaling more than $5,000 shall file a notice promptly
with the Finance Board. The notice shall include a copy of the order
imposing the sentence or fine, together with any related opinion or
statement of the court involved.
(d) Reinstatement. (1) Unless otherwise ordered by the Finance
Board, an application for reinstatement for good cause may be made in
writing by a person suspended or disbarred under paragraph (a)(1) of
this section at any time more than three years after the effective date
of the suspension or disbarment and, thereafter, at any time more than
one year after the person's most recent application for reinstatement.
An applicant for reinstatement under this paragraph (d)(1) may, in the
Finance Board's sole discretion, be afforded a hearing.
(2) An application for reinstatement for good cause by any person
suspended or disbarred under paragraph (b)(1) of this section may be
filed at any time, but not less than one (1) year after the applicant's
most recent application. An applicant for reinstatement for good cause
under this paragraph (d)(2) may, in the Finance Board's sole discretion,
be afforded a hearing. However, if all the grounds for suspension or
disbarment under paragraph (b)(1) of this section have been removed by a
reversal of the order of suspension or disbarment or by termination of
the underlying suspension or disbarment, any person suspended or
disbarred under paragraph (b)(1) of this section may apply immediately
for reinstatement and shall be reinstated upon written application
notifying the Finance Board that the grounds have been removed.
(e) Conferences. (1) The Finance Board may confer with a proposed
respondent concerning allegations of misconduct or other grounds for
censure, disbarment or suspension, regardless of whether a proceeding
for censure, disbarment or suspension has been commenced. If a
conference results in a stipulation in connection with a proceeding in
which the individual is the respondent, the stipulation may be entered
in the record at the request of either party to the proceeding.
(2) Resignation or voluntary suspension. In order to avoid the
institution of or a decision in a disbarment or suspension proceeding, a
person who practices before the Finance Board may consent to censure,
suspension or disbarment from practice. At the discretion of the Finance
Board, the individual may be censured, suspended or disbarred in
accordance with the consent offered.
(f) Hearings under this section. Hearings conducted under this
section shall be conducted in substantially the same manner as other
hearings under this part, provided that in proceedings to terminate an
existing suspension or disbarment order, the person seeking the
termination of the order shall bear the burden of going forward with an
application supported with proof that the suspension should be
terminated. The Finance Board may, in its sole discretion, direct that
any proceeding to terminate an existing suspension or disbarment be
limited to written submissions. All hearings held under this section
shall be closed to the public unless the Finance Board, on its own
motion or upon the request of a party, otherwise directs that the
hearing be open to the public.
PART 910_FREEDOM OF INFORMATION ACT REGULATION--Table of Contents
Sec.
910.1 Definitions.
910.2 Records available to the public.
910.3 Requests for records.
910.4 Finance Board response to requests for records.
910.5 Records not disclosed.
[[Page 55]]
910.6 Disclosure of Federal Home Loan Bank examination reports.
910.7 Records of financial regulatory agencies held by the Finance
Board.
910.8 Appeals.
910.9 Fees.
Authority: 5 U.S.C. 552.
Source: 63 FR 37485, July 13, 1998, unless otherwise noted.
Redesignated at 65 FR 8256, Feb. 18, 2000.
Editorial Note: Nomenclature changes to part 910 appear at 65 FR
20346, Apr. 17, 2000.
Sec. 910.1 Definitions.
As user in this part:
Agency has the meaning set forth in 5 U.S.C. 552(f)(1).
Duplication means the process of making a copy of a record in order
to respond to a FOIA request, including paper copies, microfilm, audio-
video materials, and computer diskettes or other electronic copies.
Financial regulatory agency means the FRB, OCC, FDIC, OTS, NCUA,
Farm Credit Administration, or a state officer, agency, supervisor, or
other entity that has regulatory authority over, or is empowered to
institute enforcement action against, a financial institution, including
an insurance company.
FOIA means the Freedom of Information Act, as amended (5 U.S.C.
552).
FOIA Officer means the Finance Board employee who is authorized to
make determinations as provided in this part. The mailing address for
the FOIA Officer is Federal Housing Finance Board, 1777 F Street, NW,
Washington, DC 20006.
Record means information or documentary material the Finance Board
maintains in any form or format, including an electronic form or format,
which the Finance Board:
(1) Made or received under federal law or in connection with the
transaction of public business;
(2) Preserved or determined is appropriate for preservation as
evidence of Finance Board operations or activities or because of the
value the information it contains; and
(3) Controls at the time it receives a request.
Requester means any person, including an individual, corporation,
firm, organization, or other entity, who makes a request to the Finance
Board under FOIA for records.
Review means the process of examining a record to determine whether
all or part of the record may be withheld, and includes redacting or
otherwise processing the record for disclosure to a requester. It does
not include time spent:
(1) Resolving legal or policy issues regarding the application of
exemptions to a record; or
(2) At the administrative appeal level, unless the Finance Board
determines that the exemption under which it withheld records does not
apply and the records are reviewed again to determine whether a
different exemption may apply.
Search means the time spent locating records responsive to a
request, manually or by electronic means, including page-by-page or
line-by-line identification of responsive material within a record.
Unusual circumstances means the need to:
(1)Search for and collect records from establishments that are
separate from the office processing the request;
(2) Search, review, and duplicate a voluminous amount of separate
and distinct records in order to process a single request; or
(3) Consult with another agency or among two or more components of
the Finance Board that have a substantial interest in the determination
of a request.
Working days do not include Saturdays, Sundays, and legal public
holidays.
[63 FR 37485, July 13, 1998, as amended at 65 FR 8257, 8258, Feb. 18,
2000; 65 FR 20346, Apr. 17, 2000; 67 FR 12844, Mar. 20, 2002]
Sec. 910.2 Records available to the public.
(a) General. (1) It is the policy of the Finance Board to respond
promptly to all FOIA requests.
(2) The Finance Board may disclose records that were previously
published or disclosed or are customarily furnished to the public in the
course of the performance of official duties without complying with this
part. These records include, but are not limited to, the annual report
the Finance Board
[[Page 56]]
submits to Congress pursuant to section 2B(d) of the Act (12 U.S.C.
1422b(d)), press releases, Finance Board forms, and materials published
in the Federal Register.
(3) Except as provided in the Privacy Act (5 U.S.C. 552a), the
Finance Board's Privacy Act regulation (12 CFR part 913), or paragraph
(a)(2) of this section, the Finance Board shall not disclose records
except in accordance with the requirements of this part.
(b) Reading room. (1) Subject to Sec. Sec. 910.5 through 910.7, the
following records shall be available for public inspection and copying
in the Finance Board reading room from 9:00 a.m. to 4:00 p.m. each
working day:
(i) Final opinions or orders of the Finance Board in the
adjudication of cases.
(ii) A record of the final votes of each member of the Board of
Directors in every Finance Board proceeding.
(iii) Statements of policy and interpretations adopted by the
Finance Board that are not published in the Federal Register.
(iv) Administrative staff manuals and instructions to staff that
affect a member of the public.
(v) Records previously disclosed to any requester pursuant to this
part which, because of the nature of their subject matter, the Finance
Board has determined will likely be the subject of subsequent requests
for substantially the same records, and a general index thereof.
(vi) Current indices that provide identifying information about all
matters issued, adopted, or promulgated by the Finance Board.
(vii) The report the Finance Board submits to the Attorney General
pursuant to 5 U.S.C. 552(e).
(2) The Finance Board shall make each reading room record created on
or after November 1, 1996 available by computer telecommunications or
other electronic means, such as on computer diskettes or on the Finance
Board's Internet Web site, found at http://www.fhfb.gov.
(3) The Finance Board shall assess fees for searching, reviewing, or
duplicating reading room records in accordance with Sec. 910.9.
[63 FR 37485, July 13, 1998, as amended at 65 FR 8257, 8258, Feb. 18,
2000]
Sec. 910.3 Requests for records.
(a) Request requirements. Requests for access to, or copies of,
Finance Board records shall be in writing and addressed to the FOIA
Officer. Each request shall include the following:
(1) A description of the requested record that provides sufficient
detail to enable the Finance Board to locate the record with a
reasonable amount of effort;
(2) The requester's full name, mailing address, and a telephone
number where the requester can be reached during normal business hours;
(3) A statement that the request is made pursuant to FOIA; and
(4) At the discretion of the requester, a dollar limit on the fees
the Finance Board may incur to respond to the request for records. The
Finance Board shall not exceed such limit.
(b) Incomplete requests. If a request does not meet all of the
requirements of paragraph (a) of this section, the FOIA Officer may
advise the requester that additional information is needed. If the
requester submits a corrected request, the FOIA Officer shall treat the
corrected request as a new request.
[63 FR 37485, July 13, 1998, as amended at 65 FR 20346, Apr. 17, 2000]
Sec. 910.4 Finance Board response to requests for records.
(a) Response deadline. Subject to Sec. 910.9(f), within 20 working
days of receipt of a request meeting the requirements of Sec. 910.3(a)
and any extensions of time under paragraph (c) of this section, the FOIA
Officer shall:
(1) Determine whether to grant or deny the request in whole or in
part;
(2) Notify the requester in writing of the determination and the
reasons therefor; and
(3) Make the records, if any, available to the requester.
(b) Denials. If the FOIA Officer denies the request in whole or in
part, the notice required under paragraph (a)(2) of this section shall
state that the FOIA Officer is the person responsible for the denial,
the denial is not a final agency
[[Page 57]]
action, and the requester may appeal the denial under Sec. 910.8.
(c) Extensions of time. In unusual circumstances, the FOIA Officer
may extend the time limit in paragraph (a) of this section for a period
not to exceed 10 working days by notifying the requester in writing of:
(1) The reasons for the extension;
(2) The date on which a determination is expected; and
(3) The opportunity for the requester to either limit the scope of
the request so that the FOIA Officer may process it in accordance with
paragraph (a) of this section, or arrange an alternative time frame for
processing the request or a modified request.
(d) Expedited processing. (1) The FOIA Officer shall process a
request for records as soon as practicable if it is determined that
expedited processing is appropriate or the requester demonstrates a
compelling need. To demonstrate a compelling need, a requester shall
submit a written application certified to be true and correct to the
best of the requester's knowledge and belief to the FOIA Officer. The
application shall state that:
(i) The failure to obtain the records on an expedited basis could
reasonably be expected to pose an imminent threat to the life or
physical safety of an individual; or
(ii) With respect to a requester who is primarily engaged in
disseminating information, such as a representative of the news media as
defined in Sec. 910.9(a)(4)(iv), there is urgency to inform the public
concerning actual or alleged Finance Board activity.
(2) Within 10 working days of receipt of an application for
expedited processing that meets the requirements of paragraph (d)(1) of
this section, the FOIA Officer shall determine whether to grant or deny
the application and notify the requester in writing of the
determination.
(3) A requester may appeal the denial of an application for
expedited processing by submitting a written application stating the
grounds for the appeal to the FOIA Officer. The Finance Board shall
expeditiously determine whether to grant or deny the appeal and shall
notify the requester in writing of the determination, the name and title
or position of the person responsible for the determination, and of the
provisions for judicial review of this final action under 5 U.S.C.
552(a) (4) and (6).
(e) Providing responsive records. The FOIA Officer shall provide one
copy of a record to a requester in any form or format requested if the
record is readily reproducible by the Finance Board in that form or
format by regular U.S. mail to the address indicated in the request
unless other arrangements are made, such as taking delivery of the
document at the Finance Board. At the option of the requester and upon
the requester's agreement to pay fees in accordance with Sec. 910.9,
the FOIA Officer shall provide copies by facsimile transmission or other
express delivery methods.
[63 FR 37485, July 13, 1998, as amended at 65 FR 8257, 8258, Feb. 18,
2000; 65 FR 20346, Apr. 17, 2000; 67 FR 12844, Mar. 20, 2002]
Sec. 910.5 Records not disclosed.
(a) Records exempt from disclosure. Except as otherwise provided in
this part, the Finance Board shall not disclose records that are:
(1) Specifically authorized under criteria established by an
Executive order to be kept secret in the interest of national defense or
foreign policy and are in fact properly classified pursuant to such
Executive order.
(2) Related solely to the Finance Board's internal personnel rules
and practices.
(3) Specifically exempted from disclosure by a statute other than
FOIA if such statute requires the record to be withheld from the public
in such a manner as to leave no discretion on the issue, establishes
particular criteria for withholding, or refers to particular types of
records to be withheld.
(4) Trade secrets and commercial or financial information obtained
from a person and privileged or confidential.
(5) Inter- or intra-agency memorandums or letters that would not be
available by law to a party other than an agency in litigation with the
Finance Board.
(6) Personnel, medical, or similar files the disclosure of which
would constitute a clearly unwarranted invasion of personal privacy.
[[Page 58]]
(7) Compiled for law enforcement purposes, but only to the extent
that the production of such law enforcement records or information:
(i) Could reasonably be expected to interfere with enforcement
proceedings;
(ii) Would deprive a person of a right to a fair trial or an
impartial adjudication;
(iii) Could reasonably be expected to constitute an unwarranted
invasion of personal privacy;
(iv) Could reasonably be expected to disclose the identity of a
confidential source, including a State, local, or foreign agency or
authority, any private institution, or a Bank, which furnished
information on a confidential basis, and, in the case of a record
compiled by criminal law enforcement authority in the course of a
criminal investigation or by an agency conducting a lawful national
security investigation, information furnished by a confidential source;
(v) Would disclose techniques and procedures for law enforcement
investigations or prosecutions, or would disclose guidelines for law
enforcement investigations or prosecutions if such disclosure could
reasonably be expected to risk circumvention of the law; or
(vi) Could reasonably be expected to endanger the life or physical
safety of any individual.
(8) Contained in or related to examination, operating, or condition
reports prepared by, on behalf of, or for the use of the Finance Board,
a Bank, or a financial regulatory agency.
(9) Geological and geophysical information and data, including maps,
concerning wells.
(b) Reasonably segregable portions. (1) The Finance Board shall
provide a requester with any reasonably segregable portion of a record
after redacting the portion that is exempt from disclosure under
paragraph (a) of this section.
(2) The Finance Board shall make a reasonable effort to estimate the
volume of redacted information and provide that information to the
requester unless providing the estimate would harm an interest protected
by the exemption under which the redaction is made.
(3) The Finance Board shall indicate the estimated volume of
redacted information on the released portion of the record unless
providing the estimate would harm an interest protected by the exemption
under which the redaction is made. If technically feasible, the Finance
Board shall make the indication at the place in the record where the
redaction is made.
(c) Public interest. The Finance Board may disclose records it has
authority to withhold under paragraph (a) of this section upon a
determination that disclosure would be in the public interest.
[63 FR 37485, July 13, 1998, as amended at 65 FR 8257, Feb. 18, 2000]
Sec. 910.6 Disclosure of Federal Home Loan Bank examination reports.
The Finance Board may disclose an examination, operating, or
condition report of a Bank or a related record to a financial regulatory
agency upon a determination that:
(a) The person requesting the record on behalf of the financial
regulatory agency has the authority to make such request;
(b) The financial regulatory agency is requesting the record for a
legitimate regulatory purpose; and
(c) The financial regulatory agency making the request agrees that
it shall not disclose the record pursuant to FOIA, the agency's
regulations, or any other authority.
[63 FR 37485, July 13, 1998, as amended at 65 FR 8257, Feb. 18, 2000]
Sec. 910.7 Records of financial regulatory agencies held by the Finance
Board.
The Finance Board shall not disclose an examination, operating, or
condition report, or other record prepared by, on behalf of, or for the
use of a financial regulatory agency. Upon a receipt of a request for
such records, the FOIA Officer shall promptly refer the request to the
appropriate agency and notify the requester of the referral.
[65 FR 20346, Apr. 17, 2000]
Sec. 910.8 Appeals.
(a) Procedure. (1) If the FOIA Officer has denied a request in whole
or in
[[Page 59]]
part, the requester may appeal the denial by submitting a written
application to the FOIA Officer stating the grounds for the appeal
within 30 working days of the date of the determination under Sec.
910.4.
(2) Subject to Sec. 910.9(f), within 20 working days of receipt of
an application for appeal meeting the requirements of paragraph (a)(1)
of this section and any extensions of time under paragraph (a)(3) of
this section, the Finance Board shall determine whether to grant or deny
the appeal and notify the requester in writing of the determination, the
name and title or position of the person responsible for the
determination, and the provisions for judicial review of this final
action under 5 U.S.C. 552(a)(4).
(3) In unusual circumstances, the FOIA Officer may extend the time
limit in paragraph (a)(2) of this section for a period not to exceed 10
working days by notifying the requester in writing of the reasons for
the extension and the date on which a determination is expected.
(b) Appeal during pendency of judicial review. If a requester files
an action in a United States district court under 5 U.S.C. 552(a)(4)
concerning a request for Finance Board records before exhausting the
administrative appeals process for that request under paragraph (a) of
this section, the Finance Board may:
(1) Initiate and process an administrative appeal; or
(2) Continue to process an administrative appeal previously filed
under paragraph (a) of this section.
[63 FR 37485, July 13, 1998, as amended at 65 FR 8257, 8258, Feb. 18,
2000; 65 FR 20346, Apr. 17, 2000]
Sec. 910.9 Fees.
(a) Fees. Except as otherwise provided in a statute specifically
providing for setting fees for particular types of records or in this
section, the Finance Board shall assess against each requester the
direct costs of responding to a request for records.
(1) If the records are requested for a commercial use, the direct
costs are limited to the reasonable operating costs the Finance Board
incurs to search, review, and duplicate records.
(2) If the records are not requested for a commercial use and the
requester is an educational institution, non-commercial scientific
institution, or representative of the news media, the direct costs are
limited to the reasonable operating costs the Finance Board incurs to
duplicate records in excess of 100 pages.
(3) If neither the request nor the requester is described in
paragraphs (a) (1) or (2) of this section, the direct costs are limited
to the reasonable operating costs the Finance Board incurs to search in
excess of two hours and duplicate records in excess of 100 pages.
(4) For purposes of this section, the term:
(i) Commercial use request means a request from, or on behalf of, a
person who seeks records for a use or purpose that furthers the
commercial, trade, or profit interests of the requester or the person on
whose behalf the request is made.
(ii) Educational institution means a preschool, public or private
elementary or secondary school, or institution of undergraduate,
graduate, professional, or vocational higher education that operates a
program of scholarly research.
(iii) Non-commercial scientific institution means a nonprofit
institution operated solely for the purpose of conducting scientific
research the results of which are not intended to promote any particular
product or industry.
(iv) Representative of the news media means a requester who is
actively gathering information that is about current events or would be
of current interest to the public for an entity that is organized and
operated to publish or broadcast news to the public.
(b) Fees when no records are provided. The Finance Board may assess
a fee for the direct costs of searching for a requested record the
Finance Board cannot locate or if located, determines to be exempt from
disclosure under Sec. 910.5.
(c) Interest. The Finance Board may assess interest at the rate
prescribed in 31 U.S.C. 3717 on any unpaid fees beginning 31 days after
the earlier of the date of the determination under Sec. 910.4 or the
date a fee statement is mailed to a requester. Interest shall accrue
from such date.
[[Page 60]]
(d) Exceptions. Notwithstanding paragraphs (a) or (b) of this
section, the FOIA Officer may determine not to assess a fee or to reduce
a fee if:
(1) The routine cost of collecting and processing the fee is likely
to equal or exceed the amount of the fee.
(2) The fee is equal to or less than 10 dollars.
(3) Disclosure of the record is in the public interest because it is
likely to contribute significantly to public understanding of the
operations or activities of the government and is not primarily in the
commercial interest of the requester.
(i) A requester may apply in writing to the FOIA Officer for a
waiver of fees under this paragraph (d)(3). A fee waiver request shall
include the following:
(A) The requester's interest in and proposed use of the record;
(B) Whether the requester will derive income or other benefit from
the record;
(C) An explanation of how the public will benefit from disclosure,
including the requester's ability and intention to disseminate the
information to the public; and
(D) The requester's expertise in the subject area of the record.
(ii) In determining whether disclosure of a record is in the public
interest, the FOIA Officer shall consider whether the record:
(A) Concerns identifiable operations or activities of the Finance
Board;
(B) Is meaningfully informative in relation to the subject matter of
the request;
(C) Contributes to an understanding of the subject matter by the
public at large, and the significance of that contribution; and
(D) Furthers, or is primarily in, the requester's commercial
interest.
(e) Aggregating requests. If the FOIA Officer reasonably believes
that a requester or a group of requesters acting in concert is
attempting to break a request down into a series of requests for the
purpose of evading the assessment of fees, the FOIA Officer may
aggregate such requests and assess fees in accordance with this section.
(f) Collecting fees. (1) The Finance Board shall deem any request
for Finance Board records as an agreement by the requester to pay fees
and interest assessed in accordance with this section.
(2) To pay fees and interest assessed under this section, a
requester shall deliver to the Office of Management, located at the
Federal Housing Finance Board, 1777 F Street, NW., Washington, DC.
20006, a check or money order made payable to the ``Federal Housing
Finance Board.''
(3) Prior to disclosing any record, the FOIA Officer may require a
requester to agree in writing to pay actual fees and interest incurred
in accordance with this section if the estimated fee will likely exceed
$25 but not $250.
(4) The FOIA Officer may require a requester to pay an estimated fee
in advance if:
(i) It is determined that the fee will likely exceed $250;
(ii) The requester previously has failed to pay a fee assessed under
this section within 30 days of the earlier of the date of the
determination under Sec. 910.4 or the date a fee statement was
transmitted to a requester; or
(iii) The requester previously has failed to timely pay a fee
assessed in accordance with the FOIA regulation of another federal
agency.
(5) The Finance Board shall promptly refund to a requester any
estimated advance fee paid under paragraph (f)(4) of this section that
exceeds the actual fee. The FOIA Officer shall assess the requester for
the amount by which the actual fee exceeds the estimated advance fee
payment.
(6) The FOIA Officer may administratively close a request if the
requester previously has failed to pay a fee assessed under this section
or in accordance with the FOIA regulation of another federal agency
unless the requester can substantiate that the debt was paid.
(g) Fee schedule. The Finance Board shall assess fees in accordance
with the following schedule:
Search
Supervisory/Professional Staff....... $53.00 per hour
Clerical Staff....................... $28.00 per hour
Computer Operator.................... $48.00 per hour
Review............................... $53.00 per hour
[[Page 61]]
Duplication
Photocopies.......................... $.10 per page
Diskettes............................ $.50 per diskette
CD-ROMs.............................. $1.00 per CD
Transcription of audio tape.......... $4.50 per page
Certification, seal and attestation.. $5.00 per document
Delivery
Facsimile transmission (long long distance charges plus
distance). $.25 per page
Facsimile transmission (local)....... $.25 per call plus $.25 per
page
Express delivery service............. actual cost
[63 FR 37485, July 13, 1998, as amended at 64 FR 5930, Feb. 8, 1999, as
amended at 65 FR 8257, 8258, Feb. 18, 2000; 65 FR 20346, Apr. 17, 2000;
67 FR 12844, Mar. 20, 2002; 68 FR 39812, July 3, 2003]
PART 911_AVAILABILITY OF UNPUBLISHED INFORMATION--Table of Contents
Sec.
911.1 Definitions.
911.2 Purpose and scope.
911.3 Prohibition on unauthorized use and disclosure of unpublished
information.
911.4 Requests for unpublished information by document or testimony.
911.5 Consideration of requests.
911.6 Persons and entities with access to unpublished information.
911.7 Availability of unpublished information by testimony.
911.8 Availability of unpublished information by document.
911.9 Fees.
Authority: 5 U.S.C. 301; 12 U.S.C. 1422b(a)(1).
Source: 64 FR 44106, Aug. 13, 1999, unless otherwise noted.
Redesignated at 65 FR 8256, Feb. 18, 2000.
Sec. 911.1 Definitions.
As used in this part:
Legal proceeding means any administrative, civil, or criminal
proceeding, including a grand jury or discovery proceeding, in which
neither the Finance Board nor the United States is a party.
Supervised entity means a Bank, the Office of Finance, and the
Financing Corporation.
Unpublished information means information and documents created or
obtained by the Finance Board in connection with the performance of
official duties, whether the information or documents are in the
possession of the Finance Board, a current or former Finance Board
employee or agent, a supervised entity, a Bank member, government
agency, or some other person or entity; and information and documents
created or obtained by, or in the memory of, a current or former Finance
Board employee or agent, that was acquired in the person's official
capacity or in the course of performing official duties. It does not
include information or documents the Finance Board must disclose under
the Freedom of Information Act (5 U.S.C. 552), Privacy Act (5 U.S.C.
552a), or the Finance Board's implementing regulations (12 CFR parts 910
and 913, respectively). It also does not include information or
documents that were previously published or disclosed or are customarily
furnished to the public in the course of the performance of official
duties such as the annual report the Finance Board submits to Congress
pursuant to section 2B(d) of the Act (12 U.S.C. 1422b(d)), press
releases, Finance Board forms, and materials published in the Federal
Register.
[64 FR 44106, Aug. 13, 1999, as amended at 65 FR 8258, Feb. 18, 2000; 67
FR 12844, Mar. 20, 2002]
Sec. 911.2 Purpose and scope.
(a) Purpose. The purposes of this part are to:
(1) Maintain the confidentiality and control the dissemination of
unpublished information;
(2) Conserve the time of employees for official duties and ensure
that Finance Board resources are used in the most efficient manner;
(3) Maintain the Finance Board's impartiality among private
litigants; and
(4) Establish an orderly mechanism for the Finance Board to process
expeditiously and respond appropriately to requests for unpublished
information.
(b) Scope. (1) This part applies to a request for and use and
disclosure of unpublished information, including a request for
unpublished information by document or testimony arising out of a legal
proceeding in which neither the Finance Board nor the United States is a
party. It does not apply to a request
[[Page 62]]
for unpublished information in a legal proceeding in which the Finance
Board or the United States is a party or a request for information or
records the Finance Board must disclose under the Freedom of Information
Act, Privacy Act, or the Finance Board's implementing regulations.
(2) This part does not, and may not be relied upon to create any
substantive or procedural right or benefit enforceable against the
Finance Board.
Sec. 911.3 Prohibition on unauthorized use and disclosure of unpublished
information.
(a) In general. Possession or control by any person, supervised
entity, Bank member, government agency, or other entity of unpublished
information does not constitute a waiver by the Finance Board of any
privilege or its right to control, supervise, or impose limitations on,
the subsequent use and disclosure of the information.
(b) Current and former employees and agents. Except as authorized by
this part or otherwise by the Finance Board, no current or former
Finance Board employee or agent may disclose or permit the disclosure in
any manner of any unpublished information to anyone other than a Finance
Board employee or agent for use in the performance of official duties.
(c) Other persons or entities possessing unpublished information.
(1) Except as authorized in writing by the Finance Board, no person,
supervised entity, Bank member, government agency, or other entity in
possession or control of unpublished information may disclose or permit
the use or disclosure of such information in any manner or for any
purpose.
(2) All unpublished information made available under this part
remains the property of the Finance Board and may not be used or
disclosed for any purpose other than that authorized under this part
without the prior written permission of the Finance Board.
(3) Reports of examination, supervisory correspondence, and other
unpublished information lawfully in the possession of a supervised
entity, Bank member, or government agency remains the property of the
Finance Board and may not be used or disclosed for any purpose other
than that authorized under this part without the prior written
permission of the Finance Board.
(4) Any person or entity that discloses or uses unpublished
information except as expressly authorized under this part may be
subject to the penalties provided in 18 U.S.C. 641 and other applicable
laws. A current Finance Board, Bank, or Office of Finance employee also
may be subject to administrative or disciplinary proceedings.
(d) Exception for supervised entities and Bank members. When
necessary or appropriate for business purposes, a supervised entity,
Bank member, or any director, officer, employee, or agent thereof, may
disclose unpublished information, including information contained in, or
related to, supervisory correspondence or reports of examination, to a
person or entity officially connected with the supervised entity or Bank
member as officer, director, employee, attorney, agent, auditor, or
independent auditor. A supervised entity, Bank member, or a director,
officer, employee, or agent thereof, also may disclose unpublished
information to a consultant under this paragraph if the consultant is
under a written contract to provide services to the supervised entity or
Bank member and the consultant has agreed in writing:
(1) To abide by the prohibition on the disclosure of unpublished
information contained in this section; and
(2) That it will not to use the unpublished information for any
purposes other than those stated in its contract to provide services to
the supervised entity or Bank member.
(e) Government agencies. The Finance Board may make reports of
examination, supervisory correspondence, and other unpublished
information available to another federal agency or a state agency for
use where necessary in the performance of the agency's official duties.
As used in this paragraph, the term agency does not include a grand
jury.
[64 FR 44106, Aug. 13, 1999, as amended at 65 FR 8258, Feb. 18, 2000; 67
FR 12844, Mar. 20, 2002]
[[Page 63]]
Sec. 911.4 Requests for unpublished information by document or testimony.
(a) Form of requests. A request for unpublished information must be
submitted to the Finance Board in writing and include a detailed
description of the basis for the request. At a minimum, the request must
demonstrate that:
(1) The requested information is highly relevant to the purpose for
which it is sought;
(2) The requested information is not available from any other
source;
(3) The need for the information clearly outweighs the need to
maintain its confidentiality; and
(4) The need for the information clearly outweighs the burden on the
Finance Board to produce it.
(b) Requests for documents. If the request is for unpublished
information by document, the request must include the elements in
paragraph (a) of this section and also must adequately describe the
record or records sought by type and date.
(c) Requests for testimony. (1) If the request is for unpublished
information by testimony, the request must include the elements in
paragraph (a) of this section and also must set forth the intended use
of the testimony, a summary of the scope of the testimony requested, and
a showing that no document or the testimony of other non-Finance Board
persons, including retained experts, could be provided and used in lieu
of the testimony.
(2) Upon submitting a request to the Finance Board for unpublished
information by testimony, the requester must notify all other parties to
the matter at issue of the request.
(3) After receipt of a request for unpublished information by
testimony but before the requested testimony occurs, a party to the
matter at issue who did not join in the request and who wishes to
question the witness beyond the scope of the testimony sought by the
request, must timely submit its own request for unpublished information
pursuant to this part.
(d) Requests in connection with legal proceedings. If the request
for unpublished information arises out of a legal proceeding, the
Finance Board generally will require that the legal proceeding already
be filed before it will consider the request. In addition to the
elements in paragraph (a) of this section, requests in connection with
legal proceedings must include the caption and docket number of the
case; the forum; the name, address, phone number, and electronic mail
address, if available, of counsel to all other parties to the legal
proceeding; the requester's interest in the case; a summary of the
issues in litigation; and the reasons for the request, including the
relevance of the unpublished information and how the requested
information will contribute substantially to the resolution of one or
more specifically identified issues in the legal proceeding.
(e) Expedited requests. If a requester seeks a response in less than
60 days, the request must explain why the request was not submitted
earlier and why the Finance Board should expedite the request.
(f) Where to submit requests. Send requests for unpublished
information to the Office of General Counsel, Federal Housing Finance
Board, 1777 F Street, NW., Washington, DC 20006.
(g) Additional information. (1) From the requester. The Office of
General Counsel may consult with the requester to refine and limit the
scope of the request to make compliance less burdensome or to obtain
information necessary to make an informed determination on the request.
A requester's failure to cooperate in good faith with the Office of
General Counsel may serve as the basis for a determination not to grant
the request.
(2) From others. The Office of General Counsel may inquire into the
facts and circumstances underlying a request for unpublished information
and rely on sources of information other than the requester, including
other parties to the matter at issue.
Sec. 911.5 Consideration of requests.
(a) Discretion. Each decision concerning the availability of
unpublished information is at the sole discretion of the Finance Board
based on a weighing of all appropriate factors. The decision is a final
agency action that exhausts administrative remedies for disclosure of
the information.
[[Page 64]]
(b) Time to respond. The Finance Board generally will respond in
writing to a request for unpublished information within 60 days of
receipt absent exigent or unusual circumstances and dependent upon the
scope and completeness of the request.
(c) Factors the Finance Board may consider. The factors the Finance
Board may consider in making a determination regarding the availability
of unpublished information include:
(1) Whether and how the requested information is relevant to the
purpose for which it is sought;
(2) Whether information reasonably suited to the requester's needs
other than the requested information is available from another source;
(3) Whether the requested information is privileged;
(4) If the request is in connection with a legal proceeding, whether
the proceeding has been filed;
(5) The burden placed on the Finance Board to respond to the
request;
(6) Whether production of the information would be contrary to the
public interest; and
(7) Whether the need for the information clearly outweighs the need
to maintain the confidentiality of the information.
(d) Disclosure of unpublished information by others. When a person
or entity other than the Finance Board has a claim of privilege
regarding unpublished information and the information is in the
possession or control of that person or entity, the Finance Board, at
its sole discretion, may respond to a request for the information by
authorizing the person or entity to disclose the information to the
requester pursuant to an appropriate confidentiality order. Finance
Board authorization to disclose information under this paragraph does
not preclude the person or entity in possession of the unpublished
information from asserting its own privilege, arguing that the
information is not relevant, or asserting any other argument to protect
the information from disclosure.
(e) Notice to supervised entities and Bank members. The Finance
Board generally will notify a supervised entity or Bank member that it
is the subject of a request, unless the Finance Board, in its sole
discretion, determines that to do so would advantage or prejudice any of
the parties to the matter at issue.
[64 FR 44106, Aug. 13, 1999, as amended at 65 FR 8258, Feb. 18, 2000]
Sec. 911.6 Persons and entities with access to unpublished information.
(a) Notice to Finance Board. Any person, including a current or
former Finance Board employee or agent, or any entity, including a
supervised entity, Bank member, or government agency that receives a
request for, or is served with a subpoena, order, or other legal process
to disclose unpublished information by document or testimony, must
immediately notify the Office of General Counsel.
(b) Response of person or entity served with request. Unless the
Finance Board has authorized in writing disclosure of the requested
information:
(1) A current or former Finance Board employee or agent or a
supervised entity that must respond to a subpoena, order, or other legal
process, must decline to disclose the requested information, citing this
part as authority.
(2) A non-Finance Board person or entity may not disclose
unpublished information unless:
(i) The requester has sought the information from the Finance Board
under this part; and
(ii) After the Finance Board or the Department of Justice has had
the opportunity to appear and oppose disclosure, a Federal court has
ordered the person or entity to disclose the information.
(c) Finance Board response. If the Finance Board does not authorize
in writing disclosure of the requested information, the Finance Board
will provide a copy of this part to the person or entity at whose
instance the process was issued and advise that person or entity or the
court or other body that the Finance Board has prohibited disclosure of
the information under this part. The Finance Board or the Department of
Justice may intervene in the matter at issue, attempt to have the
compulsory process withdrawn, or register other appropriate objections.
[64 FR 44106, Aug. 13, 1999, as amended at 65 FR 8258, Feb. 18, 2000]
[[Page 65]]
Sec. 911.7 Availability of unpublished information by testimony.
(a) Scope. (1) The scope of permissible testimony is limited to that
set forth in the written authorization granted by the Finance Board. The
Finance Board may act to ensure that the scope of testimony provided is
consistent with the written authorization.
(2) A party to the matter at issue that did not join in a request
for unpublished information who wishes to question a witness beyond the
authorized scope must request expanded authorization under this part.
The Finance Board will attempt to render decisions on such requests in
an expedited manner.
(3) The Finance Board generally will not authorize a current
employee or agent to provide expert or opinion testimony for a private
party.
(b) Manner in which testimony is given. (1) The Finance Board
ordinarily will make the authorized testimony of a former or current
employee or agent available only through written interrogatories or
deposition. The Finance Board will not authorize testimony at a trial or
hearing unless the requester shows that properly developed deposition
testimony could not be used or would be inadequate at the trial or
hearing.
(2) If the Finance Board has authorized testimony in connection with
a legal proceeding, the requester must cause a subpoena to be served on
the employee in accordance with applicable rules of procedure, with a
copy by registered or certified mail to the Office of General Counsel.
(3) If the authorized testimony is through deposition, the
deposition ordinarily will take place at the Finance Board's offices at
a time that will avoid substantial interference with the performance of
the employee's official duties.
(4) The requester is responsible for all costs associated with an
employee's appearance, including provision of a copy of a transcript of
the deposition at the request of the Office of General Counsel. The
person whose deposition was transcribed does not waive his or her right
to review the transcript and note errors.
(c) Restrictions on use and disclosure. The Finance Board may
condition its authorization of deposition testimony on an agreement of
the parties to appropriate limitations, such as an agreement to keep the
transcript of the testimony under seal or to make the transcript
available only to the parties, the court or other body, or the jury.
Upon request made pursuant to this part or on its own initiative, the
Finance Board may authorize use of a deposition transcript in another
legal proceeding or non-adversarial matter.
(d) Responsibility of litigants. If the testimony is disclosed in
connection with a legal proceeding, the requester is responsible for:
(1) Promptly notifying all other parties to the legal proceeding of
the disclosure, and, after entry of a protective order, providing copies
of the testimony to the other parties who are signatories and subject to
the protective order; and
(2) At the conclusion of the legal proceeding, retrieving the
testimony from the court or other body's file as soon as it is no longer
required and certifying to the Finance Board that every party covered by
the protective order has destroyed the unpublished information.
Sec. 911.8 Availability of unpublished information by document.
(a) Scope. The scope of permissible document disclosure is limited
to that set forth in the written authorization granted by the Finance
Board. The Finance Board may act to ensure that the scope of documents
provided is consistent with the written authorization.
(b) Restrictions on use and disclosure. The Finance Board may
condition a decision to disclose unpublished information by document on
entry of a protective order satisfactory to the Finance Board by the
court or other body presiding in a legal proceeding or, in non-
adversarial matters, on a written agreement of confidentiality that
limits access of third parties to the unpublished information. In a
legal proceeding in which a protective order already has been entered,
the Finance
[[Page 66]]
Board may condition a decision to disclose unpublished information upon
inclusion of additional or amended provisions in the protective order.
Upon request made pursuant to this part or on its own initiative, the
Finance Board may authorize use of the documents in another legal
proceeding or non-adversarial matter.
(c) Responsibility of litigants. If the documents are disclosed in
connection with a legal proceeding, the requester is responsible for:
(1) Promptly notifying all other parties to the legal proceeding of
the disclosure, and, after entry of a protective order, providing copies
of the documents to the other parties that are signatories and subject
to the protective order; and
(2) At the conclusion of the legal proceeding, retrieving the
documents from the court or other body's file as soon as they are no
longer required and certifying to the Finance Board that every party
covered by the protective order has destroyed the unpublished
information.
(d) Certification or authentication. If the Finance Board has
authorized disclosure of unpublished information by document, it will
provide certified or authenticated copies of the document upon request.
Sec. 911.9 Fees.
(a) Fees for records search, copying, and certification. Unless
waived or reduced, a requester must pay a fee to the Finance Board for
the costs of searching, copying, authenticating, or certifying
unpublished information in accordance with 12 CFR 910.9. The Office of
Resource Management generally will bill a requester upon completion of
the production, but, in certain instances, may require a requester to
remit payment prior to providing the requested information. To pay fees
assessed under this section, a requester must deliver to the Office of
Resource Management, located at the Federal Housing Finance Board, 1777
F Street, NW., Washington, DC 20006, a check or money order made payable
to the ``Federal Housing Finance Board.''
(b) Witness fees and mileage. (1) Current Finance Board or federal
employees. If the Finance Board authorizes disclosure of unpublished
information by testimony of a current Finance Board employee or agent or
a former Finance Board employee or agent who is still in the employ of
the United States, upon completion of the testimonial appearance the
requester must remit promptly to the Office of Resource Management
payment for witness fees and mileage computed in accordance with 28
U.S.C. 1821.
(2) Former employees or agents. If the Finance Board authorizes
disclosure of unpublished information by testimony of a former Finance
Board employee or agent who is not currently employed by the United
States, upon completion of the testimonial appearance the requester must
remit promptly to the witness any witness fees or mileage due in
accordance with 28 U.S.C. 1821.
[64 FR 44106, Aug. 13, 1999, as amended at 65 FR 8258, Feb. 18, 2000]
PART 912_INFORMATION REGARDING MEETINGS OF THE BOARD OF DIRECTORS OF
THE FEDERAL HOUSING FINANCE BOARD--Table of Contents
Sec.
912.1 Definitions.
912.2 Purpose and scope.
912.3 Open meetings.
912.4 Closed meetings.
912.5 Procedures for closing meetings.
912.6 Notice of meetings.
Authority: 5 U.S.C. 552b.
Source: 58 FR 19202, Apr. 13, 1993, unless otherwise noted.
Redesignated at 65 FR 8256, Feb. 18, 2000.
Sec. 912.1 Definitions.
As used in this part:
Board Director or Director means a member of the Board of Directors.
Chairperson includes the Acting Chairperson.
Meeting means any deliberations of three or more Directors of the
Board of Directors, that determines or results in the joint conduct or
disposition of official Finance Board business, but does not include:
(1) Discussions to determine whether meetings will be open or closed
or whether information pertaining to closed meetings will be disclosed;
[[Page 67]]
(2) Discussions to determine whether to schedule a meeting with less
than seven days notice, or to change the time, place or subject matter
of a scheduled meeting; and
(3) Disposition of Finance Board business by circulation of written
materials on proposed actions to individual Directors for proposed
actions, and notational voting by the individual Directors on such
proposed actions.
Public observation means the right of the general public to attend
open meetings of the Board of Directors, but does not include the right
to participate therein unless invited to do so by the Chairperson.
Secretary to the Board includes the Acting Secretary if the position
of Secretary is vacant.
Sunshine Act means the Government in the Sunshine Act (5 U.S.C.
552b).
[58 FR 19202, Apr. 13, 1993, as amended at 65 FR 8258, Feb. 18, 2000.
Redesignated and amended at 67 FR 12844, Mar. 20, 2002]
Sec. 912.2 Purpose and scope.
(a) This part is issued by the Finance Board pursuant to the
Sunshine Act, which requires Federal agencies, headed by collegial
bodies, to promulgate regulations to implement its provisions. The
purpose of these regulations is to provide the public with access to
information regarding the decisionmaking processes of the Board of
Directors of the Finance Board, while protecting the privacy rights of
individuals and the ability of the Board of Directors to carry out its
responsibilities.
(b) The Board of Directors shall not jointly conduct or dispose of
official Finance Board business other than in accordance with this part.
[58 FR 19202, Apr. 13, 1993, as amended at 65 FR 8258, Feb. 18, 2000.
Redesignated and amended at 67 FR 12844, Mar. 20, 2002]
Sec. 912.3 Open meetings.
(a) Except as provided in Sec. 912.4, every portion of every
meeting of the Board of Directors shall be open to public observation.
(b) Unless otherwise specified in the public notice, open meetings
of the Board of Directors shall be held in the Board Room of the Finance
Board at 1777 F Street, NW., Washington, DC, at the time specified in
the public notice.
[58 FR 19202, Apr. 13, 1993, as amended at 65 FR 8258, Feb. 18, 2000]
Sec. 912.4 Closed meetings.
(a) The Board of Directors may close a meeting, or portion thereof,
to public observation, or withhold information from the public
pertaining to a meeting, when it determines that opening the meeting, or
a portion thereof, or the public disclosure of information pertaining to
such meeting, or portion thereof, is likely to:
(1) Disclose matters that are:
(i) Specifically authorized under criteria established by an
Executive Order to be kept secret in the interests of national defense
or foreign policy; and
(ii) Are, in fact, properly classified pursuant to such Executive
Order;
(2) Relate solely to the internal personnel rules and practices of
the Finance Board;
(3) Disclose matters specifically exempt from disclosure by statute
(other than the Freedom of Information Act (5 U.S.C. 552)), provided
that such statute:
(i) Requires that the matters be withheld from the public in such a
manner as to leave no discretion on the issue; or
(ii) Establishes particular criteria for withholding matters from
the public or refers to particular types of matters to be withheld;
(4) Disclose trade secrets or commercial or financial information
that is obtained from a person and is privileged or confidential;
(5) Involve accusing any person of a crime, or formally censuring
any person;
(6) Disclose information of a personal nature where disclosure would
constitute a clearly unwarranted invasion of personal privacy;
(7) Disclose investigatory records compiled for law enforcement
purposes, or information which if written would be contained in such
records, but only to the extent that the production of such records or
information would:
(i) Interfere with enforcement proceedings;
(ii) Deprive a person of a right to a fair trial or an impartial
adjudication;
[[Page 68]]
(iii) Constitute an unwarranted invasion of personal privacy;
(iv) Disclose the identity of a confidential source and, in the case
of a record compiled by a criminal law enforcement authority in the
course of a criminal investigation or by an agency conducting a lawful
national security intelligence investigation, confidential information
furnished only by the confidential source;
(v) Disclose investigative techniques and procedures; or
(vi) Endanger the life or physical safety of law enforcement
personnel;
(8) Disclose information contained in or related to examination,
operating, or condition reports prepared by, on behalf of, or for the
use of the Finance Board or another agency responsible for the
regulation or supervision of Banks or other financial institutions;
(9) Disclose information the premature disclosure of which would be
likely to:
(i) (A) Lead to significant financial speculation in currencies,
securities, or commodities;
(B) Significantly endanger the stability of any of the Banks or any
other financial institution; or
(ii) Significantly frustrate implementation of a proposed Finance
Board action, except that this paragraph shall not apply in any instance
where the Finance Board has already disclosed to the public the content
or nature of its proposed action, or where the Finance Board is required
by law to make such disclosure on its own initiative prior to taking
final action on such proposal; or
(10) Specifically concern the issuance of a subpoena by the Board of
Directors, or the Finance Board's participation in a civil action or
proceeding, an action in a foreign court or international tribunal, or
an arbitration, or the initiation, conduct or disposition of a
particular case of formal adjudication pursuant to the procedures in 5
U.S.C. 554 or otherwise involving a determination on the record after
opportunity for a hearing.
(b) A meeting or portions of a meeting shall not be closed nor
information withheld pursuant to paragraph (a) of this section if the
Board of Directors finds that the public interest requires otherwise.
[58 FR 19202, Apr. 13, 1993. Redesignated at 65 FR 8256, Feb. 18, 2000,
as amended at 67 FR 12844, Mar. 20, 2002]
Sec. 912.5 Procedures for closing meetings.
(a) Regular procedures. (1) Except as provided in paragraph (b) of
this section, a meeting of the Board of Directors, or portion thereof,
will be closed to public observation, and information pertaining to such
meeting, or portion thereof, will be withheld from the public, when a
majority of the Board of Directors determines by recorded vote that such
meeting, or portion thereof, or the withholding of information qualifies
for exemption under Sec. 912.4, and the Board of Directors does not
find that the public interest requires otherwise.
(2) Except as provided in paragraph (a)(3) of this section, a
separate vote of the Board Directors will be taken with respect to the
closing or the withholding of information as to each meeting or portion
thereof that is proposed to be closed to public observation, or with
respect to information that is proposed to be withheld pursuant to
paragraph (a) of this section.
(3) A single vote may be taken with respect to a series of meetings,
a portion or portions of which are proposed to be closed to public
observation, or with respect to any information concerning such series
of meetings proposed to be withheld, so long as each meeting in such
series involves the same particular matters and is scheduled to be held
no more than thirty days after the initial meeting in such series.
(4) The vote of each Board Director taken pursuant to paragraph (a)
of this section shall be recorded, and no proxies shall be allowed.
(5) Whenever any person's interests may be directly affected by any
portion of a meeting for any of the reasons referred to in Sec.
912.4(a)(5), (6), or (7), such person may send a written request to the
Secretary to the Board asking that such portion of the meeting be closed
to public observation. The Secretary to the Board will transmit the
request to
[[Page 69]]
each Board Director, and upon the request of a Director, a recorded vote
will be taken of the Board of Directors whether to close the meeting to
public observation.
(6)(i) Within one day of any vote taken pursuant to paragraph (a) of
this section, the Finance Board will make publicly available through the
Secretary to the Board a written copy of such vote reflecting the vote
of each Board Director.
(ii) If a meeting or portion thereof is to be closed to public
observation, the Finance Board within one day of the vote taken pursuant
to paragraph (a) of this section will make publicly available through
the Secretary to the Board a full, written explanation of its action
closing the meeting, or portion thereof, together with a list of all
persons expected to attend the meeting and their affiliation, except to
the extent such information is determined by the Board of Directors to
be exempt from disclosure under Sec. 912.4(a).
(7) Any person may request in writing to the Secretary to the Board
that an announced closed meeting, or portion thereof, be open to public
observation. The Secretary to the Board will transmit the request to
each Board Director, and upon the request of a Director, a recorded vote
will be taken of the Board of Directors on whether to open the meeting
to public observation.
(b) Expedited procedures. (1) Since a majority of the meetings, of
the Board of Directors may be closed pursuant to Sec. 912.4(a)(4), (8),
(9)(i) or (10), 5 U.S.C. 552b(d)(4) allows the Finance Board to use
expedited procedures in closing such meetings. The following are
examples of meetings of the Board of Directors, or portions thereof,
that may be closed to the public under these expedited procedures: sale
of consolidated obligations, and review of examination, operating or
condition reports of Banks.
(2) A decision to close a meeting, or portion thereof, under
paragraph (b) of this section shall be made at the beginning of the
meeting, or portion thereof, by majority vote of the Directors.
(3)(i) The Finance Board shall maintain a record of each of the
votes taken by its Board of Directors to close a meeting, or portion
thereof, or to withhold public access to information thereof, under
paragraph (b) of this section.
(ii) A copy of such record, reflecting the vote of each Board
Director on the question of closing a meeting, or portion thereof, or
withhholding public access to information thereof, under this paragraph
(b) of this section, shall be made available to any member of the public
upon request to the Secretary to the Board.
(4) Public announcement of the time, place and subject matter of
meetings, or portions thereof, closed under this paragraph (b) of this
section shall be made at the earliest practical time.
(c) Records of closed proceedings--(1) Transcripts or electronic
recording. Except as provided in paragraph (c)(2) of this section, the
Finance Board shall make and maintain a complete transcript or verbatim
electronic recording of the proceedings at each meeting, or portion
thereof, closed to public observation under paragraph (a) or (b) of this
section.
(2) Minutes. The Finance Board may make and maintain a set of
complete minutes, in lieu of such transcript or electronic recording,
with respect to meetings, or portions thereof, closed or information
withheld under Sec. 912.4(a)(8), (9)(i) or (10). Such set of minutes
shall fully and clearly describe all matters discussed and provide a
full and accurate summary of any action taken, and the reasons therefor,
including a description of each of the views expressed on any item and
the record of any roll call vote (reflecting the vote of each Board
Director on the question). All documents considered in connection with
any action shall be identified in such set of minutes.
(3) Availability of Records. (i) The transcript, electronic
recording or set of minutes of an item discussed, or of testimony
received, at a meeting, shall be made available promptly to the public
through the Secretary to the Board except in cases where the Board of
Directors determines that the item or testimony contains information
which may be withheld under Sec. 912.4(a).
(ii) Copies of such transcript, electronic recording or set of
minutes, disclosing the identity of each speaker,
[[Page 70]]
shall be furnished to any person at the actual cost of duplication or
transcription.
(iii) The Finance Board shall maintain a complete copy of the
transcript, verbatim electronic recording or complete set of minutes of
each meeting, or portion thereof closed to the public, for at least two
years after such meeting, or until one year after the conclusion of any
proceeding of the Board of Directors with respect to which the meeting
or portion thereof was held, whichever occurs later.
(d) Legal certification for closing meeting. (1) For every meeting,
or portion thereof, of the Board of Directors closed pursuant to
paragraphs (a) or (b) of this section, the General Counsel (or in the
General Counsel's absence or incapacity the senior legal officer
available) shall publicly certify that the meeting or portion thereof
may be closed to the public pursuant to the Sunshine Act and this part,
and specifically state the relevant exemption in support thereof.
(2) A copy of the certification, together with a statement from the
Chairperson or, when appropriate, the Acting Chairperson or designee,
setting forth the time and place of the meeting and the persons present,
shall be retained in the permanent files of the Finance Board.
[58 FR 19202, Apr. 13, 1993, as amended at 65 FR 8258, Feb. 18, 2000; 65
FR 12844, Mar. 20, 2002]
Sec. 912.6 Notice of meetings.
(a) Scope of notice. (1) Except as provided in Sec. 912.4(a) that
such information is determined to be exempt from disclosure, each open
meeting of the Board of Directors, or each meeting closed under the
regular procedures in Sec. 912.5(a), will be preceded by public notice
as described in this section.
(2) The notices for meetings of the Board of Directors closed under
the expedited procedures pursuant to Sec. 912.5(b) will be made in
accordance with Sec. 912.5(b)(4).
(b) Content of notice. A notice of an open meeting or a meeting
closed under the regular procedures in Sec. 912.5(a) will state the
time, place, and subject matter of the meeting, whether it is to be open
or closed to the public, and the name and telephone number of the
Secretary to the Board for information about the meeting. Each such
notice shall be posted in the lobby of the Finance Board offices, and
may be made available in addition by other means or at other locations
as deemed desirable. Immediately following the posting of each such
notice, the Finance Board will publish the notice in the Federal
Register.
(c) Time--(1) Seven days notice. Except as provided in paragraph
(c)(2) of this section, a public notice of open meetings or meetings
closed under Sec. 912.5(a) will be made at least seven days in advance
of each meeting.
(2) Less than seven days notice. When a majority of the Board of
Directors determine by recorded vote that Finance Board business
requires a meeting to be called at any earlier date, the seven-day prior
notice rule may be suspended and notice shall be made at the earliest
practicable time.
(d) Amendment of notice--(1) Time and place. A change in the time or
place of a meeting following public notice may be made only if announced
at the earliest practicable time.
(2) Subject matter. A change in the subject matter of a meeting or a
re-determination to open or close a meeting, or portions thereof, may be
made, after public notice, only if:
(i) At least a majority of the Board Directors determines by
recorded vote that Finance Board business so requires and that no
earlier notice of the change was possible; and
(ii) The Finance Board publicly announces the change and the vote of
each Board Director by posting a notice thereof in the lobby of the
Finance Board offices at the earliest practicable time.
(3) Timing of amendment. A public announcement of a change in either
the time, place or subject matter of a meeting may be made after the
commencement of the meeting affected.
(4) Publication of amendment. Each change to a notice of a meeting
will be published in the Federal Register, following the Finance Board's
public announcement of the change.
[58 FR 19202, Apr. 13, 1993, as amended at 65 FR 8258, Feb. 18, 2000; 67
FR 12845, Mar. 20, 2002]
[[Page 71]]
PART 913_PRIVACY ACT REGULATION--Table of Contents
Sec.
913.1 Definitions.
913.2 Purpose and scope.
913.3 How do I make a request under the Privacy Act?
913.4 How will the Finance Board respond to your Privacy Act request?
913.5 What can I do if I am dissatisfied with the Finance Board's
response to my Privacy Act request?
913.6 Fees.
913.7 Exemptions.
Authority: 5 U.S.C. 552a.
Source: 68 FR 39812, July 3, 2003, unless otherwise noted.
Sec. 913.1 Definitions.
For purposes of this part:
Amendment means any correction, addition to or deletion of
information in a record.
FOIA means the Freedom of Information Act, as amended (5 U.S.C.
552).
Individual means a citizen of the United States or an alien lawfully
admitted to the United States for permanent residence.
Maintain means to keep or hold and preserve in an existing state,
and includes the terms collect, use, disseminate and control.
Privacy Act means the Privacy Act of 1974, as amended (5 U.S.C.
552a).
Privacy Act Official means the Finance Board employee who is
authorized to make determinations as provided in this part. The mailing
address for the Privacy Act Official is: Privacy Act Office, Federal
Housing Finance Board, 1777 F Street, NW., Washington, DC 20006.
Record means any item, collection or grouping of information about
an individual that the Finance Board maintains within a system of
records and contains the individual's name or the identifying number,
symbol or other identifying particular assigned to the individual, such
as a finger or voice print or photograph.
System of records means a group of records the Finance Board
maintains or controls from which information is retrieved by the name of
an individual or by some identifying number, symbol or other identifying
particular assigned to the individual. You can find a description of the
Finance Board's systems of records as part of the ``Privacy Act
Compilation'' published by the Federal Register. You can access the
``Privacy Act Compilation'' in most large reference and university
libraries or electronically on the World Wide Web at http://
www.access.gpo.gov/su--docs/aces/PrivacyAct.shtml. You also can request
a copy of the Finance Board's systems of records from the Privacy Act
Official.
Working days do not include Saturdays, Sundays and legal public
holidays.
Sec. 913.2 Purpose and scope.
(a) This Part 913 contains the rules the Finance Board follows under
the Privacy Act. The rules apply to all records in systems of records
the Finance Board maintains that are retrieved by an individual's name
or personal identifier. They describe the procedures by which
individuals may request access to records about themselves or about and
on behalf of another individual as the parent or guardian of a minor or
as the guardian of someone determined by a court to be incompetent,
request amendment or correction of those records, and request an
accounting of disclosures of those records by the Finance Board.
Whenever it is appropriate to do so, the Finance Board automatically
processes a Privacy Act request for access to records under both the
Privacy Act and the FOIA, following the rules contained in part 910 of
this chapter and this part 913. The Finance Board processes a request
under both the Privacy Act and the FOIA so you will receive the maximum
amount of information available to you by law.
(b) This part does not entitle you to any service or to the
disclosure of any record to which you are not entitled under the Privacy
Act. It also does not, and may not be relied upon to create any
substantive or procedural right or benefit enforceable against the
Finance Board.
Sec. 913.3 How do I make a request under the Privacy Act?
(a) In general. You can make a Privacy Act request on your own
behalf or on behalf of another individual as the
[[Page 72]]
parent or guardian of a minor or as the guardian of someone determined
by a court to be incompetent. To make sure that the Privacy Act Office
receives your request without delay, you should include the notation
``Privacy Act Request'' on the front of your envelope and also at the
beginning of your request.
(b) Requests for access to records. You may make a request for
access to a record by appearing in person or by writing directly to the
Privacy Act Official. You must describe the record that you want in
enough detail to enable the Privacy Act Office to locate the system(s)
of records containing it with a reasonable amount of effort. Your
request should describe the record sought, the time period in which you
believe it was compiled, and the name or identifying number of each
system of records in which you believe it is kept.
(c) Requests for amendment or correction of records. You may make a
request for amendment or correction of a Finance Board record by writing
to the Privacy Act Official. Your request should identify each
particular record in question and the system(s) of records in which the
record is located, describe the amendment or correction that you want,
and state why you believe that the record is not accurate, relevant,
timely or complete. You may submit any documentation that you think
would be helpful.
(d) Requests for an accounting of record disclosures. You may
request an accounting of disclosures made by the Finance Board to
another person, organization or agency of any record by writing to the
Privacy Act Official. Your request for an accounting should identify
each particular record in question. An accounting generally includes the
date, nature and purpose of each disclosure, as well as the name and
address of the person, organization or agency to which the disclosure
was made.
(e) Verification of identity. When making a Privacy Act request, you
must verify your identity in accordance with these procedures to protect
your privacy or the privacy of the individual on whose behalf you are
acting. If you make a Privacy Act request and you do not follow these
identity verification procedures, the Finance Board cannot process your
request.
(1) Verifying your own identity. If you make your request in person
and your identity is not known to the Privacy Act Official, you must
provide either two forms of identification with photographs, or one form
of identification with a photograph and a properly authenticated birth
certificate. If you make your request by mail, your signature either
must be notarized or submitted under 28 U.S.C. 1746, a law that permits
statements to be made under penalty of perjury as a substitute for
notarization. You may fulfill this requirement by having your signature
on your request letter witnessed by a notary, or including the following
statement just before the signature on your request letter: ``I declare
under penalty of perjury that the foregoing is true and correct.
Executed on [date].''
(2) Verification of guardianship. When making a request as the
parent or guardian of a minor or as the guardian of someone determined
by a court to be incompetent, for access to records about that
individual, you must establish:
(i) The identity of the individual who is the subject of the record,
by stating the individual's name, current address and date and place of
birth;
(ii) Your own identity, as required in paragraph (e)(1) of this
section;
(iii) That you are the parent or guardian of the individual, which
you may prove by providing a properly authenticated copy of the
individual's birth certificate showing your parentage or a properly
authenticated court order establishing your guardianship; and
(iv) That you are acting on behalf of the individual in making the
request.
Sec. 913.4 How will the Finance Board respond to your Privacy Act request?
(a) When will the Finance Board respond to my request? The Privacy
Act Official generally will respond to you in writing within 10 working
days of receipt of a request that meets the requirements of Sec. 913.3.
The Privacy Act Official may extend the response time in unusual
circumstances, such as the need to consult with another agency
[[Page 73]]
about a record or to retrieve a record shipped offsite for storage.
(b) What will the Finance Board's response include? The written
response will include the Privacy Act Official's determination whether
to grant or deny your request in whole or in part and a brief
explanation of the reasons for the determination. If you requested
access to records, the Privacy Act Official will make the records, if
any, available to you. If you requested amendment or correction of a
record, the response will describe any amendment or correction made and
advise you of your right to obtain a copy of the amended or corrected
record, in disclosable form, under this part.
(c) Adverse determinations--(1) What is an adverse determination?
Adverse determinations consist of the following determinations by the
Privacy Act Official:
(i) A determination to withhold any requested record in whole or in
part;
(ii) A determination to deny a request to amend or correct a record
in whole or in part;
(iii) A determination not to provide an accounting of disclosures;
(iv) A determination that a requested record does not exist or
cannot be located;
(v) A determination that what has been requested is not a record
subject to the Privacy Act; or
(vi) A determination on any disputed fee matter.
(2) Responses that include an adverse determination. If the Privacy
Act Official makes an adverse determination with respect to your
request, the written response under this section will state that the
Privacy Act Official is the person responsible for the adverse
determination, that the adverse determination is not a final agency
action, and that you may appeal the adverse determination under Sec.
913.5.
Sec. 913.5 What can I do if I am dissatisfied with the Finance Board's
response to my Privacy Act request?
(a) Appeals. You can appeal any adverse determination made by the
Privacy Act Official in responding to your Privacy Act request. If you
wish to seek review by a court of any adverse determination or denial of
a request, you first must appeal it under this section.
(b) How do I make an appeal? You may make an appeal by submitting a
written application giving the reasons why the adverse determination
should be overturned within 30 working days of the date of the Privacy
Act Official's determination under Sec. 913.4. You should include the
notation ``Privacy Act Appeal'' on the front of your envelope and also
at the beginning of your application to make sure that the Privacy Act
Office receives your appeal without delay.
(c) When will the Finance Board respond to my appeal? The Finance
Board generally will respond to you in writing within 30 working days of
receipt of an appeal that meets the requirements of paragraph (b) of
this section. The Finance Board may extend the response time in unusual
circumstances, such as the need to consult with another agency about a
record or to retrieve a record shipped offsite for storage.
(d) What will the Finance Board's response include? The written
response will include the Finance Board's determination whether to grant
or deny your appeal in whole or in part, a brief explanation of the
reasons for the determination, and information about the Privacy Act
provisions for court review of the determination. If your appeal
concerns a request for access to records, the Finance Board will make
the records, if any, available to you. If your appeal concerns amendment
or correction of a record, the response will describe any amendment or
correction made and advise you of your right to obtain a copy of the
amended or corrected record, in disclosable form, under this part and
your right to file a Statement of Disagreement under paragraph (e) of
this section.
(e) Statements of Disagreement--(1) What is a Statement of
Disagreement? A Statement of Disagreement is a concise written statement
in which you clearly identify each part of any record that you dispute
and explain your reason(s) for disagreeing with the Finance Board's
denial in whole or in part of your appeal to amend or correct that
record.
(2) How do I file a Statement of Disagreement? You must deliver your
[[Page 74]]
Statement of Disagreement to the Privacy Act Official within 30 working
days of the Finance Board's denial in whole or in part of your appeal
concerning amendment or correction of a record.
(3) What will the Finance Board do with my Statement of
Disagreement? The Finance Board will place your Statement of
Disagreement in the system(s) of records in which the disputed record is
maintained. The Finance Board also may append a concise statement of its
reason(s) for denying the request to amend or correct the record. The
Finance Board will provide a copy of your Statement of Disagreement and
its explanation, if any, along with the record whenever the record is
disclosed.
Sec. 913.6 Fees.
(a) Your request is an agreement to pay fees. The Finance Board
considers your Privacy Act request as your agreement to pay all
applicable fees unless you specify a limit on the amount of fees you
agree to pay. The Finance Board will not exceed the specified limit
without your written agreement.
(b) How does the Finance Board calculate fees? The Finance Board
will charge a fee for duplication of a record under the Privacy Act in
the same way it charges for duplication of records under the FOIA (12
CFR 910.9). The Finance Board will not charge any fees to search for or
review records.
Sec. 913.7 Exemptions.
(a) What is the effect of an exemption?--(1) In general. Except as
provided in paragraph (a)(2) of this section, the Finance Board will not
provide you with an accounting of disclosures or make available to you
records that are exempt under paragraph (b) of this section.
(2) Certain law enforcement records. The Finance Board will disclose
a law enforcement record that is subject to an exemption if any right,
privilege or benefit to which you would otherwise be entitled by Federal
law, or for which you would otherwise be eligible, is denied as a result
of the maintenance of the record, except to the extent that disclosure
of the record would reveal the identity of a source who furnished
information to the government under an express promise that his or her
identity would be held in confidence.
(b) Which records are exempt?--(1) Office of Inspector General
Investigative Records. Pursuant to 5 U.S.C. 552a(k)(2), a record
contained in the system of records titled ``Office of Inspector General
Investigative Records'' (FHFB-6) is exempt from 5 U.S.C. 552a(c)(3),
(d), (e)(1), (e)(4)(G), (e)(4)(H), (e)(4)(I), and (f), to the extent
that the record consists of investigatory material compiled:
(i) For law enforcement purposes; or
(ii) For the purpose of determining suitability, eligibility or
qualifications for federal civilian employment or federal contracts, if
disclosure of the record would reveal the identity of a source who
furnished information to the government under an express promise that
his or her identity would be held in confidence.
(2) Personnel Investigative Records. Pursuant to 5 U.S.C.
552a(k)(5), a record contained in the system of records titled
``Personnel Investigative Records'' (FHFB-5) is exempt from 5 U.S.C.
552a(c)(3), (d), (e)(1), (e)(4)(G), (e)(4)(H), (e)(4)(I), and (f), to
the extent that disclosure would reveal the identity of a source who
furnished information to the government under an express promise that
his or her identity of the source would be held in confidence.
(c) Why are these records exempt?--(1) Office of Inspector General
Investigative Records. The records contained in the system of records
titled ``Office of Inspector General Investigative Records'' (FHFB-6)
are exempt:
(i) To prevent interference with law enforcement proceedings;
(ii) To avoid an unwarranted invasion of personal privacy by
revealing information about third parties such as other subjects of an
investigation, law enforcement personnel, witnesses and other sources of
information;
(iii) To fulfill commitments made to protect the confidentiality of
sources including Federal employees who furnish a complaint or
information to the Office of the Inspector General and other sources of
information;
(iv) To assure access by the Office of Inspector General to sources
of confidential information, including those
[[Page 75]]
contained in federal, state and local criminal law enforcement
information systems;
(v) To prevent disclosure of law enforcement techniques and
procedures; and
(vi) To avoid endangering the life or physical safety of
confidential sources and law enforcement personnel.
(2) Personnel Investigative Records. The records contained in the
system of records titled ``Personnel Investigative Records'' (FHFB-5)
are exempt:
(i) To fulfill commitments made to protect the confidentiality of
sources; and
(ii) To assure access to sources of confidential information,
including those contained in federal, state and local criminal law
enforcement information systems.
[68 FR 39812, July 3, 2003, as amended at 68 FR 59309, Oct. 15, 2003]
[[Page 76]]
SUBCHAPTER C_GOVERNANCE AND MANAGEMENT OF THE FEDERAL HOME LOAN BANKS
PART 915_BANK DIRECTOR ELIGIBILITY, APPOINTMENT AND ELECTIONS
--Table of Contents
Sec.
915.1 Definitions.
915.2 Dates.
915.3 Director elections.
915.4 Capital stock report.
915.5 Determination of member votes.
915.6 Elective director nominations.
915.7 Eligibility requirements for elective directors.
915.8 Election process.
915.9 Prohibition on actions to influence director elections.
915.10 Selection of appointive directors.
915.11 Conflict of interests policy for Bank directors.
915.12 Reporting requirements for Bank directors
915.13 Ineligible Bank directors.
915.14 Vacant Bank directorships.
915.15 Minimum number of elective directorships.
915.16 1999 and 2000 Election of Directors.
915.17 Staggered directorships in the 2000 and 2001 elections.
Appendix A to Part 915--Staggering for FHLBank Boards of Directors.
Authority: 12 U.S.C. 1422a(a)(3), 1422b(a), 1426, 1427, and 1432.
Source: 63 FR 65688, Nov. 30, 2000, unless otherwise noted.
Redesignated at 65 FR 8256, Feb. 18, 2000.
Editorial Note: Nomenclature changes to part 915 appear at 67 FR
12845, Mar. 20, 2002.
Sec. 915.1 Definitions.
For purposes of this part:
Bona fide resident of a Bank district means an individual who:
(1) Maintains a principal residence within the Bank district; or
(2) If serving as an appointive director, owns or leases in his or
her own name a residence within the Bank district and is employed within
a voting state within the Bank district.
Discretionary directorship means an elective or appointive
directorship created by the Finance Board pursuant to section 7(a) of
the Act (12 U.S.C. 1427(a)) for districts that include five or more
states.
FHFB ID number means the number assigned to each member by the
Finance Board and used by the Finance Board and the Banks to identify a
particular member.
Guaranteed directorship means an elective directorship that is
required by section 7(b) of the Act (12 U.S.C. 1427(b)) and Sec. 915.15
to be designated as representing Bank members that are located in a
particular state.
Non-guaranteed directorship means an elective directorship that is
either a discretionary directorship or a stock directorship.
Record date means December 31 of the calendar year immediately
preceding the election year.
Stock directorship means an elective directorship that is designated
by the Finance Board as representing the members located in a particular
state based on the amount of Bank stock held by the members in that
state, and which is in excess of the number of guaranteed directorships
allocated to that state.
Voting state means the District of Columbia, Puerto Rico, or the
state of the United States in which a member's principal place of
business, as determined in accordance with part 925 of this chapter, is
located as of the record date. The voting state of a member with a
principal place of business located in the U.S. Virgin Islands as of the
record date shall be Puerto Rico, and the voting state of a member with
a principal place of business located in American Samoa, Guam, or the
Commonwealth of the Northern Mariana Islands as of the record date shall
be Hawaii.
[63 FR 65688, Nov. 30, 1998, as amended at 65 FR 8259, Feb. 18, 2000; 65
FR 41568, July 6, 2000; 67 FR 12845, Mar. 20, 2002]
Sec. 915.2 Dates.
If any date specified in this part, or specified by a Bank pursuant
to this part, falls on a Saturday, Sunday, or
[[Page 77]]
Federal holiday, the relevant time period shall be deemed to include the
next business day.
[63 FR 65688, Nov. 30, 1998]
Sec. 915.3 Director elections.
(a) Responsibilities of the Banks. Each Bank annually shall conduct
an election the purpose of which is to fill all elective directorships
designated by the Finance Board as commencing on January 1 of the
calendar year immediately following the year of the election. Subject to
the provisions of the Act and in accordance with the requirements of
this part, the disinterested members of the board of directors of each
Bank, or a committee of disinterested directors, shall administer and
conduct the annual election of directors. In so doing, the disinterested
directors may use Bank staff or independent contractors to perform
ministerial and administrative functions concerning the elections
process. The term of office of each elective director shall be three
years, except as adjusted pursuant to section 7(d) of the Act (12 U.S.C.
1427(d)) and Sec. 915.17 of this part to achieve a staggered board, and
shall commence on January 1 of the calendar year immediately following
the year in which the election is held. Each Bank shall complete the
election in sufficient time to allow newly elected directors to assume
their seats on January 1 of the year immediately following the election.
(b) Designation of elective directorships. The Finance Board
annually shall designate each elective directorship as representing the
members that are located in a particular state. The Finance Board shall
conduct the annual designation of directorships for each Bank based on
the number of shares of Bank stock required to be held by the members in
each state as of December 31 of the preceding calendar year. If a Bank
has issued more than one class of stock, the Finance Board shall
designate the directorships for that Bank based on the combined number
of shares required to be held by the members in each state. For purposes
of conducting the designation, if a Bank's capital plan was not in
effect on the immediately preceding December 31st, the number of shares
of Bank stock that the members were required to hold as of that date
shall be determined in accordance with Sec. 925.20 and Sec. 925.22. If
a Bank's capital plan was in effect on the immediately preceding
December 31st, the number of shares of Bank stock that the members were
required to hold as of that date shall be determined in accordance with
the minimum investment established by the capital plan for that Bank,
provided, however, that for any members whose Bank stock is less than
the minimum investment during a transition period, the amount of stock
to be used in the designation of directorships shall be the number of
shares of Bank stock actually owned by those members as of December
31st. In all cases, the Finance Board shall designate the directorships
by using the information provided by the Banks in the capital stock
report required by Sec. 915.4. The Finance Board shall allocate the
elective directorships among the states as follows:
(1) One elective directorship shall be allocated to each State
within the Bank district;
(2) If the total number of elective directorships allocated pursuant
to paragraph (b)(1) of this section is less than eight, the Finance
Board shall allocate additional elective directorships among the States,
using the method of equal proportions, until the total allocated for the
Bank equals eight;
(3) If the number of elective directorships allocated to any State
pursuant to paragraphs (b)(1) and (b)(2) of this section is less than
the number allocated to that State on December 31, 1960, as specified in
Sec. 915.15, the Finance Board shall allocate such additional elective
directorships to that State until the total allocated equals the number
allocated to that State on December 31, 1960;
(4) Pursuant to section 7(e) of the Act (12 U.S.C. 1427(e)), the
Federal Home Loan Bank of New York is hereby allocated one additional
elective directorship, which is designated as representing the members
in the Commonwealth of Puerto Rico;
(5) Pursuant to section 7(a) of the Act (12 U.S.C. 1427(a)), in any
Bank district that includes five or more states, the Finance Board,
after consultation with
[[Page 78]]
the affected Banks, may increase the number of elective directorships up
to thirteen, and the number of appointive directorships up to three-
fourths of the number of elective directorships. In determining the
number of appointive directorships, the Finance Board may round to the
nearest whole number. The annual designation of directorships shall
indicate the number of discretionary directorships, if any, to be
authorized for the succeeding year. If the Finance Board eliminates an
existing discretionary directorship, or designates such a directorship
to another state, the term of any appointive or elective director
affected by that action shall terminate after the close of business on
the immediately following December 31.
(c) Notification. On or before June 1 of each year, the Finance
Board shall notify each Bank in writing of the total number of elective
directorships established for the Bank and the number of elective
directorships designated as representing the members in each voting
State in the Bank district. If the annual designation of elective
directorships results in an existing stock directorship being
redesignated as representing members in a different state, the notice
also shall state that the directorship must be filled by an officer or
director of a member located in the newly designated state as of January
1 of the immediately following year, regardless of whether the term for
the incumbent director would have expired by that date.
(d) Location of member. In accordance with section 7(c) of the Act
(12 U.S.C. 1427(c)), unless otherwise designated by the Finance Board,
for purposes of election of directors a member shall be deemed to be
located in its voting State.
(e) 2000 designation. For any stock directorship with a term ending
December 31, 2001 that is redesignated from one state to another state
by the 2000 designation of directorships, the board of directors of the
Bank shall determine which incumbent director from the former state
shall become ineligible to serve as a result of the redesignation on the
basis of the most recent election.
[63 FR 65688, Nov. 30, 1998, as amended at 65 FR 8259, Feb. 18, 2000; 65
FR 41568, July 6, 2000; 66 FR 8307, Jan. 30, 2001; 67 FR 12845, Mar. 20,
2002]
Sec. 915.4 Capital stock report.
(a) On or before April 10 of each year, each Bank shall submit to
the Finance Board a capital stock report that indicates, as of the
record date, the number of members located in each voting state in the
Bank's district, the number of shares of Bank stock that each member
(identified by its FHFB ID number) was required to hold, and the number
of shares of Bank stock that all members located in each voting state
were required to hold. If a Bank has issued more than one class of
stock, it shall report the total shares of stock of all classes required
to be held by the members. The Bank shall certify to the Finance Board
that, to the best of its knowledge, the information provided in the
capital stock report is accurate and complete, and that it has notified
each member of its minimum capital stock holdings pursuant to Sec.
925.22(b)(1) of this chapter.
(b) If a Bank's capital plan was not in effect as of the record
date, the number of shares of Bank stock that the members are required
to hold as of the record date shall be determined in accordance with
Sec. 925.20 and Sec. 925.22. If a Bank's capital plan was in effect as
of the record date, the number of shares of Bank stock that the members
were required to hold as of that date shall be determined in accordance
with the minimum investment established by the capital plan for that
Bank, provided, however, that for any members whose Bank stock is less
than the minimum investment during a transition period, the amount of
Bank stock to be reported shall be the number of shares of Bank stock
actually owned by those members as of the record date.
[66 FR 8307, Jan. 30, 2001]
Sec. 915.5 Determination of member votes.
(a) In general. Each Bank shall determine, in accordance with this
section, the number of votes that each member
[[Page 79]]
of the Bank may cast for each directorship that is to be filled by the
vote of the members that are located in a particular state.
(b) Number of votes. For each directorship that is to be filled in
an election, each member that is located in the state to be represented
by the directorship shall be entitled to cast one vote for each share of
Bank stock that the member was required to hold as of the record date.
Notwithstanding the preceding sentence, the number of votes that any
member may cast for any one directorship shall not exceed the average
number of shares of Bank stock that were required to be held by all
members located in that state as of the record date. If a Bank has
issued more than one class of stock, it shall calculate the average
number of shares separately for each class of stock and shall apply
those limits separately in determining the maximum number of votes that
any member owning that class of stock may cast in the election. If a
Bank's capital plan was not in effect as of the record date, the number
of shares of Bank stock that a member was required to hold as of the
record date shall be determined in accordance with Sec. 925.20 and
Sec. 925.22. If a Bank's capital plan was in effect as of the record
date, the number of shares of Bank stock that a member was required to
hold as of the record date shall be determined in accordance with the
minimum investment established by the Bank's capital plan, provided,
however, that for any members whose Bank stock is less than the minimum
investment during a transition period, the amount of Bank stock to be
used shall be the number of shares of Bank stock actually owned by those
members as of the record date.
(c) Voting preferences. If the board of directors of a Bank includes
any voting preferences as part of its approved capital plan, those
preferences shall supercede the provisions of paragraph (b) of this
section that otherwise would allow a member to cast one vote for each
share of Bank stock it was required to hold as of the record date. If a
Bank establishes a voting preference for a class of stock, the members
with voting rights shall remain subject to the provisions of section
7(b) of the Act (12 U.S.C. 1427(b)) that prohibit any member from
casting any vote in excess of the average number of shares of stock
required to be held by all members in its state.
[66 FR 8308, Jan. 30, 2001, as amended at 67 FR 12845, Mar. 20, 2002]
Sec. 915.6 Elective director nominations.
(a) Election announcement. Within a reasonable time in advance of an
election, a Bank shall provide to each member in its district a written
notice of the election that includes:
(1) The number of elective directorships designated as representing
the members in each voting State in the Bank district;
(2) The name of each incumbent Bank director, the name and location
of the member at which each elective director serves, and the name and
location of the organization with which each appointive director is
affiliated, if any, and the expiration date of each Bank director's term
of office;
(3) An attachment indicating the name, location, and FHFB ID number
of every member in the member's voting state, and the number of votes
each such member may cast for each directorship to be filled in the
election, as determined in accordance with Sec. 915.5.
(4) A nominating certificate.
(b) Nominations. (1) Any member that is entitled to vote in the
election may nominate an eligible individual to fill each available
elective directorship for its voting State by submitting to its Bank,
prior to a deadline to be established by the Bank, a nominating
certificate duly adopted by the member's governing body or by an
individual authorized to act on behalf of the member's governing body.
(2) The nominating certificate shall include the name of the nominee
and the name, location, and FHFB ID number of the member at which the
nominee serves as an officer or director.
(3) The Bank shall establish a deadline for submitting nominating
certificates, which shall be no earlier than 30 calendar days after the
date on which the Bank mails the notice required by paragraph (a) of
this section, and the Bank shall not accept certificates received after
that deadline. The Bank shall retain all nominating certificates
[[Page 80]]
for at least two years after the date of the election.
(c) Accepting nominations. A Bank shall notify in writing any person
nominated for an elective directorship promptly upon receipt of the
nominating certificate. A person may accept the nomination only by
submitting an executed director eligibility certification, as prescribed
by the Finance Board, to the Bank prior to the deadline established by
the Bank. A Bank shall allow each nominee at least 30 calendar days
after the date of the notice of nomination within which to submit the
executed form. A nominee may decline the nomination by so advising the
Bank in writing, or by failing to submit a properly executed director
eligibility certification prior to the deadline. Each Bank shall retain
all information received under this paragraph for at least two years
after the date of the election.
[63 FR 65689, Nov. 30, 1998, as amended at 65 FR 8259, Feb. 18, 2000; 66
FR 8308, Jan. 30, 2001]
Sec. 915.7 Eligibility requirements for elective directors.
(a) Eligibility verification. Based on the information provided on
the director eligibility certification form prescribed by the Finance
Board, a Bank shall verify that each nominee meets all of the
eligibility requirements for elective directors set forth in the Act and
this part before placing that nominee on the ballot prepared by the Bank
under Sec. 915.8(a). A Bank shall not declare elected a nominee that it
has reason to know is ineligible to serve, nor shall it seat a director-
elect that it has reason to know is ineligible to serve.
(b) Eligibility requirements. Each elective director, and each
nominee, shall be:
(1) A citizen of the United States;
(2) An officer or director of a member that is located in the voting
state to be represented by the elective directorship, that was a member
of the Bank as of the record date, and that meets all minimum capital
requirements established by its appropriate Federal banking agency or
appropriate state regulator.
(c) Restrictions. (1) A nominee is not eligible if he or she:
(i) Is an incumbent elective director, unless:
(A) The incumbent director's term of office would expire before the
new term of office would begin; and
(B) The new term of office would not be barred by the term limit
provision of section 7(d) of the Act (12 U.S.C. 1427(d)).
(ii) Is a former elective director whose service would be barred by
the term limit provision of section 7(d) of the Act; or
(iii) Is an incumbent appointive director.
(2) For purposes of applying the term limit provision of section
7(d) of the Act (12 U.S.C. 1427(d)), a term of office that has been
adjusted to a period of less than three years in accordance with Sec.
915.17(a)(2) shall not be deemed to be a full term.
(d) Loss of eligibility. (1) An elective director shall become
ineligible to remain in office if, during his or her term of office, the
stock directorship to which he or she has been elected is eliminated or
is redesignated by the Finance Board as representing members located in
another state, in accordance with Sec. 915.3(b). The incumbent director
shall become ineligible after the close of business on December 31 of
the year in which the directorship is redesignated or eliminated.
(2) In the case of a redesignation to another state, the stock
directorship shall become vacant after the close of business on December
31 of the year in which the directorship is redesignated and the
resulting vacancy shall be filled by the board of directors of the Bank
for the remainder of the unexpired term with a person who is an officer
or director of a member located in the newly designated state, pursuant
to section 7(f) of the Act (12 U.S.C. 1427(f)).
[63 FR 65689, Nov. 30, 1998, as amended at 65 FR 8259, Feb. 18, 2000; 65
FR 41569, July 6, 2000; 66 FR 8308, Jan. 30, 2001; 67 FR 12845, Mar. 20,
2002; 67 FR 39791, June 10, 2002]
Sec. 915.8 Election process.
(a) Ballots. Promptly after verifying the eligibility of all
nominees in accordance with Sec. 915.7(a), a Bank shall prepare a
ballot for each voting State for which an elective directorship is to
[[Page 81]]
be filled and shall mail the ballot to all members within that State
that were members as of the record date. A ballot shall include at least
the following provisions:
(1) An alphabetical listing of the names of each nominee for the
member's voting State, the name, location, and FHFB ID number of the
member at which each nominee serves, the nominee's title or position
with the member, and the number of elective directorships to be filled
by members in that voting State in the election;
(2) A statement that write-in candidates are not permitted; and
(3) A confidentiality statement prohibiting the Bank from disclosing
how a member voted.
(b) Lack of nominees. If, for any voting state, all directorships to
be filled in an election are the same with regard to their respective
terms and status as guaranteed or non-guaranteed directorships, and the
number of nominees from that state is equal to or less than the number
of such directorships, the Bank shall notify the members in the affected
voting state in writing (in lieu of providing a ballot) that the
directorships are to be filled without an election due to a lack of
nominees. The Bank shall declare elected any eligible nominee, who shall
be included as a director-elect in the report of election required under
paragraph (e) of this section. If necessary, the Bank's board of
directors shall fill any elective directorship that has become vacant
due to a lack of a nominee in accordance with Sec. 915.14(a).
(c) Voting. For each directorship to be filled, a member may cast
the number of votes determined by the Bank pursuant to Sec. 915.5. A
member may not split its votes among multiple nominees for a single
directorship, nor, where there are multiple directorships to be filled
for a voting State, may it cumulatively vote for a single nominee. Any
ballots cast in violation of this subsection shall be void. To vote, a
member shall:
(1) Mark on the ballot the name of not more than one of the nominees
for each elective directorship to be filled in the member's voting
State. Each nominee so selected shall receive all of the votes that the
member is entitled to cast.
(2) Execute the ballot by resolution of the member's governing body,
or by an appropriate writing signed by an individual authorized to act
on behalf of the governing body.
(3) Deliver the executed ballot to the Bank on or before the closing
date that has been established by the Bank, which shall be no earlier
than 30 calendar days after the date the ballots are mailed in
accordance with paragraph (a) of this section. A member may not change a
ballot after it has been delivered to the Bank.
(d) Counting ballots. A Bank shall not open any ballot until after
the closing date, and may not include in the election results any ballot
received after the closing date. Promptly after the closing date, each
Bank shall tabulate, by each voting State, the votes cast in accordance
with paragraph (c) of this section, and shall declare elected the
nominee receiving the highest number of votes.
(1) If more than one elective directorship is to be filled in a
voting State, the Bank shall declare elected each successive nominee
receiving the next highest number of votes until all open elective
directorships for that voting State are filled.
(2) In the event of a tie for the last available seat, the incumbent
board of directors of the Bank shall, by a majority vote, declare
elected one of the nominees for whom the number of votes cast was tied.
(3) The Bank shall retain all ballots it receives for at least two
years after the date of the election, and shall not disclose how any
member voted.
(e) Report of election. Promptly following the election, each Bank
shall provide written notice to its members, to each nominee, and to the
Finance Board of the following:
(1) The name of each director-elect, the name and location of the
member at which he or she serves, and his or her title or position at
the member;
(2) The voting State represented by each director-elect;
(3) The expiration date of the term of office of each director-
elect;
(4) The number of members voting in the election and the total
number of votes cast, both reported by State; and
[[Page 82]]
(5) The number of votes cast for each nominee.
[63 FR 65690, Nov. 30, 1998, as amended at 65 FR 8259, Feb. 18, 2000; 65
FR 41569, July 6, 2000; 67 FR 12845, Mar. 20, 2002]
Sec. 915.9 Prohibition on actions to influence director elections.
(a) Prohibition. Except as provided in paragraph (b) of this
section:
(1) No director, officer, attorney, employee, or agent of the
Finance Board or of a Bank may:
(i) Communicate in any manner that a director, officer, attorney,
employee, or agent of the Finance Board or of a Bank, directly or
indirectly, supports the nomination or election of a particular
individual for an elective directorship; or
(ii) Take any other action to influence votes for a directorship.
(2) No member may take any action prohibited by paragraph (a)(1)(i)
of this section.
(b) Exception for incumbent Bank directors. A Bank director acting
in his or her personal capacity may support the nomination or election
of any individual for an elective directorship, provided that no Bank
director shall purport to represent the views of the Bank, the Finance
Board, any other director, or any officer, attorney, employee, or agent
of the Bank or of the Finance Board concerning the nomination or
election of a particular individual for an elective directorship.
[63 FR 65690, Nov. 30, 1998]
Sec. 915.10 Selection of appointive directors.
(a) Selection. In accordance with the Act, the Finance Board, in its
sole discretion, shall select all appointive directors.
(b) Term of office. The term of office of each appointive
directorship shall be three years, except as adjusted pursuant to
section 7(d) of the Act (12 U.S.C. 1427(d)) to achieve a staggered
board, and shall commence on January 1. In appointing directors for the
terms commencing on January 1, 2001 and 2002, respectively, the Finance
Board shall adjust the terms of any appointive directorships as
necessary to achieve the one-third staggering of the board of directors
required by section 7(d) of the Act (12 U.S.C. 1427(d)), in accordance
with the requirements of this part and the applicable matrix from the
Appendix to this part. In the case of a discretionary appointive
directorship that is terminated pursuant to Sec. 915.3(b)(5), the term
of office of the directorship shall end after the close of business on
December 31 of that year.
[63 FR 65690, Nov. 30, 1998, as amended at 65 FR 41569, July 6, 2000; 67
FR 12845, Mar. 20, 2002]
Sec. 915.11 Conflict of interests policy for Bank directors.
(a) Adoption of conflict of interests policy. Each Bank shall adopt
a written conflict of interests policy that shall apply to all Bank
directors. At a minimum, the conflict of interests policy of each Bank
shall:
(1) Require the directors to administer the affairs of the Bank
fairly and impartially and without discrimination in favor of or against
any member or nonmember borrower;
(2) Prohibit appointed directors from serving as an officer of any
Bank or as an officer or director of any member, and from owning any
equity or debt security issued by a member or from having any other
financial interest in a member;
(3) Prohibit the use of a director's official position for personal
gain;
(4) Require directors to disclose actual or apparent conflict of
interests and establish procedures for addressing such conflicts;
(5) Provide internal controls to ensure that reports are filed and
that conflicts are disclosed and resolved in accordance with this
section; and
(6) Establish procedures to monitor compliance with the conflict of
interests policy.
(b) Disclosure and recusal. A director shall disclose to the Bank's
board of directors any personal financial interests he or she has, as
well as any financial interests known to the director of any immediate
family member or business associate of the director, in any matter to be
considered by the Bank's board of directors and in any other matter in
which another person or entity does, or proposes to do, business with
the Bank. A director shall fully disclose the nature of his or her
interest in the matter
[[Page 83]]
and shall provide to the Bank's board of directors any information
requested to aid in its consideration of the director's interest. A
director shall refrain from considering or voting on any issue in which
the director, any immediate family member, or any business associate has
a financial interest.
(c) Confidential Information. Directors shall not disclose or use
confidential information received by them solely by reason of their
position with the Bank to obtain a financial interest for themselves or
for any other person.
(d) Gifts. Directors shall not accept, and shall discourage their
immediate family members from accepting, any substantial gift where the
director has reason to believe that the gift is given in order to
influence the director's actions as a member of the Bank's board of
directors, or where acceptance of such gift gives the appearance of
influencing the director's actions as a member of the board.
(e) Compensation. Directors shall not accept compensation for
services performed for the Bank from any source other than the Bank for
which the services are performed.
(f) Definitions. For purposes of this section:
(1) Immediate family member means parent, sibling, spouse, child, or
dependent, or any relative sharing the same residence as the director.
(2) Financial interest means a direct or indirect financial interest
in any activity, transaction, property, or relationship that involves
receiving or providing something of monetary value, and includes, but is
not limited to any right, contractual or otherwise, to the payment of
money, whether contingent or fixed. It does not include a deposit or
savings account maintained with a member, nor does it include a loan or
extension of credit obtained from a member in the normal course of
business on terms that are generally available to the public.
(3) Business associate means any individual or entity with whom a
director has a business relationship, including, but not limited to:
(i) Any corporation or organization of which the director is an
officer or partner, or in which the director beneficially owns ten
percent or more of any class of equity security, including subordinated
debt;
(ii) Any other partner, officer, or beneficial owner of ten percent
or more of any class of equity security, including subordinated debt, of
any such corporation or organization; and
(iii) Any trust or other estate in which a director has a
substantial beneficial interest or as to which the director serves as
trustee or in a similar fiduciary capacity.
(4) Substantial Gifts includes:
(i) Gifts of more than token value;
(ii) Entertainment or hospitality, the cost of which is in excess of
what is considered reasonable, customary, and accepted business
practices; or
(iii) Any other items or services for which a director pays less
than market value.
[63 FR 65690, Nov. 30, 1998, as amended at 65 FR 8259, Feb. 18, 2000]
Sec. 915.12 Reporting requirements for Bank directors.
(a) Annual reporting. On or before March 1 of each year, each
director shall submit to his or her Bank the appropriate executed
director eligibility certification, as prescribed by the Finance Board.
(The forms are available pursuant to Sec. 905.25 of this chapter). The
Bank shall promptly forward to the Finance Board a copy of the
certification filed by each appointive director.
(b) Report of noncompliance. If an elective or appointive director
knows or has reason to believe that he or she no longer meets the
eligibility requirements set forth in the Act or this part, the director
shall so inform the Bank in writing within 30 calendar days of first
learning of the facts causing the loss of eligibility. An appointive
director also shall inform the Finance Board in writing at the same time
that he or she informs the Bank.
[63 FR 65691, Nov. 30, 1998, as amended at 65 FR 8259, Feb. 18, 2000; 67
FR 12845, Mar. 20, 2002]
Sec. 915.13 Ineligible Bank directors.
(a) Elective directors. Upon a determination by the Finance Board or
a Bank that an elective director no longer satisfies the eligibility
requirements set forth in the Act or this part,
[[Page 84]]
or has failed to comply with the reporting requirements of Sec. 915.12,
the elective directorship shall immediately become vacant. Any elective
director that is determined to have failed to comply with the
eligibility or reporting requirements shall not continue to act as a
Bank director.
(b) Appointive directors. Except as provided herein, upon a
determination by the Finance Board that an appointive director no longer
satisfies the eligibility requirements set forth in the Act, or has
failed to comply with the reporting requirements of Sec. 915.12, the
appointive directorship shall immediately become vacant. Notwithstanding
the vacancy, an appointive director may continue to serve until a
successor assumes the directorship or the term of office expires,
whichever occurs first, and the Finance Board, in its sole discretion,
may allow an appointive director up to 90 calendar days to comply with
the eligibility or reporting requirements.
[63 FR 65691, Nov. 30, 1998, as amended at 65 FR 8259, Feb. 18, 2000]
Sec. 915.14 Vacant Bank directorships.
(a) Vacant elective directorships. (1) As soon as practicable after
a vacancy occurs, a Bank shall fill the unexpired term of office of a
vacant elective directorship by a majority vote of the remaining Bank
directors regardless of whether the remaining Bank directors constitute
a quorum of the Bank's board of directors.
(2) An individual so selected to fill a vacant elective directorship
shall satisfy all of the eligibility requirements for elective directors
set forth in the Act and this part, and shall provide to the Bank an
executed director eligibility certification. The Bank shall verify the
individual's eligibility in accordance with Sec. 915.7(a) before
allowing the individual to assume the directorship, and shall retain the
information it receives in accordance with Sec. 915.6(c).
(3) Promptly after verifying the individual's eligibility under
paragraph (a)(2) of this section, a Bank shall notify the Finance Board
and each member located in the Bank's district in writing of the
following:
(i) The name of the new elective director, the name, location and
FHFB ID number of the member at which the new director serves, and the
new director's title or position with the member;
(ii) The voting State that the new elective director represents; and
(iii) The expiration date of the new elective director's term of
office.
(b) Vacant appointive directorships. (1) As soon as practicable
after a vacancy occurs, the Finance Board shall fill the unexpired term
of office of a vacant appointive directorship.
(2) Promptly after filling a vacant appointive directorship, the
Finance Board shall notify the affected Bank in writing of the
following:
(i) The name of the new appointive director, the name and location
of the organization with which the new director is affiliated, if any,
and the new director's title or position with such organization; and
(ii) The expiration date of the new appointive director's term of
office.
(3) Promptly after receiving the notice required by paragraph (b)(2)
of this section, a Bank shall provide each of its members with the
information described in paragraphs (b)(2)(i) and (ii) of this section.
[63 FR 65691, Nov. 30, 1998, as amended at 65 FR 8259, Feb. 18, 2000]
Sec. 915.15 Minimum number of elective directorships.
Under section 7(c) of the Act (12 U.S.C. 1427(c)), the number of
elective directorships allocated to members located in each State cannot
be less than the number of directorships that were filled by the members
from that State on December 31, 1960. The following list sets forth the
States whose members held more than one (1) seat on December 31, 1960:
------------------------------------------------------------------------
No. of
elective
State directorships
on December
31, 1960
------------------------------------------------------------------------
California.............................................. 3
Colorado................................................ 2
Illinois................................................ 4
Indiana................................................. 5
Iowa.................................................... 2
Kansas.................................................. 3
Kentucky................................................ 2
Louisiana............................................... 2
Massachusetts........................................... 3
Michigan................................................ 3
Minnesota............................................... 2
Missouri................................................ 2
New Jersey.............................................. 4
[[Page 85]]
New York................................................ 4
Ohio.................................................... 4
Oklahoma................................................ 2
Pennsylvania............................................ 6
Tennessee............................................... 2
Texas................................................... 3
Wisconsin............................................... 4
------------------------------------------------------------------------
[55 FR 1399, Jan. 16, 1990, as amended at 56 FR 55221, Oct. 25, 1991.
Redesignated and amended at 63 FR 65692, Nov. 30, 1998; 67 FR 12846,
Mar. 20, 2002]
Sec. 915.16 1999 and 2000 Election of Directors.
(a) In general. The annual designation of Bank directorships
conducted by the Finance Board in 2000 pursuant to Sec. 915.3(b) shall
control with respect to the number of elective directorships to be
allocated to each state with terms commencing on January 1, 2001.
(b) Conduct of 2000 elections. After assigning any adjusted terms
that may be required by Sec. 915.17(a)(3), the board of directors of
each Bank shall determine either:
(1) To conduct new elections for every state in the district for
which an elective directorship is to commence on January 1, 2001, or
(2) To conduct new elections only in those states for which this
section requires a new election to be held and, for all other states
within the district, to use the results of the 1999 elections for the
purpose of electing directors whose terms are to commence on January 1,
2001.
(c) 1999 election results. If the number of nominees from any state
for the 1999 election of directors who remain eligible to serve as a
Bank director equals or exceeds the number of directorships designated
to that state with terms commencing on January 1, 2001, the board of
directors of the Bank may declare elected the nominee receiving the most
votes in the 1999 election and, if more than one directorship is to be
filled for that state, shall also declare elected each successive
nominee receiving the next greatest number of votes, until all
directorships designated for that state are filled. Before declaring
elected any such nominee, the board of directors of the Bank shall
confirm that the nominee is eligible to serve as a director from that
state.
(d) 2000 elections. If the number of directorships designated to any
state with terms commencing on January 1, 2001, exceeds the number of
nominees from that state in the 1999 election who remain eligible to
serve as a Bank director, then the board of directors of the Bank shall
conduct a new election for that state for all of the directorships with
terms commencing on January 1, 2001.
(e) Report of election. If the board of directors of a Bank adopts
the 1999 election results for any state, it shall provide written notice
of its decision to the Finance Board, the directors-elect, and to each
member in the affected state. The notice shall indicate the date on
which the term of office of each director-elect shall expire, and shall
indicate which terms have been adjusted in order to stagger the board of
directors as required by section 7(d) of the Act (12 U.S.C. 1427(d)).
Any such adjustments shall be made in compliance with Sec. 915.17. Such
notice shall be deemed to constitute the report of election for the 2000
election required by Sec. 915.8(e).
(f) Safe harbor. In determining whether to ratify the 1999 election
results or to hold new elections in 2000, an individual director that
would be affected by the decision of the board shall not be deemed to
have violated any regulation or Bank policy pertaining to conflicts of
interest solely by virtue of having participated in the deliberations or
by having voted on the matter.
[65 FR 41569, July 6, 2000, as amended at 67 FR 12846, Mar. 20, 2002]
Sec. 915.17 Staggered directorships in the 2000 and 2001 elections.
(a) In general. (1) In conjunction with the annual designations of
directorships for elected directors with terms commencing on January 1,
2001 and January 1, 2002, the Finance Board shall, in addition to
allocating directorships among the states, indicate the term of each
elective directorship and which directorships are to be designated as
non-guaranteed directorships. A non-guaranteed directorship
[[Page 86]]
shall retain that designation in all subsequent elections, unless the
directorship is eliminated by the Finance Board pursuant to section 7(a)
of the Act (12 U.S.C. 1427(a)) or as a consequence of a change in the
amount of Bank stock held by members located in that state. In such
subsequent elections, any non-guaranteed directorships shall be assigned
on the basis of votes received, with the directors-elect who received
the fewest votes being assigned the non-guaranteed directorships.
(2) The board of directors of each Bank shall adjust the terms of
any directorships that are to commence on January 1, 2001 or January 1,
2002, in accordance with this section and the matrix for that Bank set
forth in the appendix to this part, and shall inform the Finance Board
which directorships have been assigned adjusted terms.
(3) Where the matrix for a Bank indicates that two or more
guaranteed directorships are to be filled by persons elected from
different states in the same year, and which are to have different
terms, the board of directors of the Bank shall assign the shorter terms
among the states on any reasonable basis, as determined by Bank's board,
provided that:
(i) It uses the same methodology in making all such adjustments; and
(ii) It assigns the terms to the respective states before
determining whether to adopt the 1999 election results, in accordance
with Sec. 915.16(b).
(b) Adjustment of terms. (1) Where the matrix for a Bank indicates
that two or more guaranteed directorships are to be filled from the same
state in the same year, but which are to have different terms, the board
of directors of the Bank shall assign the terms among the eligible
nominees who have received a sufficient number of votes to be elected,
such that the nominees receiving the greater number of votes are
assigned the longer terms and those nominees receiving the lesser number
of votes are assigned the shorter terms. If the directors from any state
have been declared elected without a vote, in accordance with Sec.
915.8(b) because the number of nominees from that state was less than or
equal to the number of directorships to be filled, then the board of
directors of Bank shall assign the terms on the basis of the most recent
election.
(2) In the elections occurring in 2000 and 2001, if the matrix for
any Bank indicates that both guaranteed and non-guaranteed directorships
are to be filled from the same state in the same year, the board of
directors shall assign directorships among the eligible nominees who
have received a sufficient number of votes to be elected, such that the
nominees receiving the greatest number of votes are assigned the
guaranteed directorships and those nominees receiving the fewest votes
are assigned the non-guaranteed directorships. In the event that the
matrix for a Bank assigns a guaranteed directorship for a particular
state a shorter term than it assigns to a non-guaranteed directorship
for the same state for that year, the board of directors shall assign
the guaranteed directorship to the nominee receiving the greatest number
of votes.
(c) Safe harbor. In determining which directorships shall be
assigned a reduced term, an individual director that could be affected
by the decision of the board shall not be deemed to have violated any
regulation or Bank policy pertaining to conflicts of interest solely by
virtue of having participated in the deliberations or by having voted on
the matter.
(d) Other adjustments. The board of directors of the Bank may not
adjust the term of any director other than as provided in this section.
[65 FR 41570, July 6, 2000, as amended at 67 FR 12846, Mar. 20, 2002]
[[Page 87]]
Appendix A to Part 915--Staggering For FHLBank Boards of Directors
Table 1
----------------------------------------------------------------------------------------------------------------
Boston FHLBank (10 seats: 8 Guaranteed staggering: 2-
guaranteed by statute and 2 not Term Non-guaranteed seats 3-3 Total staggering: 4-
guaranteed) 3-3
----------------------------------------------------------------------------------------------------------------
6 Seats to be filled in 2000
Election:
* Board must allocate 1
Seat to a 2-year term.
Mass. Seat....................... 3/2 Years*.
Conn. Seat....................... 3/2 Years*.
Maine Seat....................... 3/2 Years*.
R. I. Seat....................... 3/2 Years*.
Mass. Seat....................... 2 Years.................
Conn. Seat....................... 2 Years................. Not Guaranteed
(Discretionary
Seat).
4 Seats to be filled in 2001
Election:
Mass. Seat....................... 3 Years.
N.H. Seat........................ 3 Years.
Vermont Seat..................... 3 Years.
Mass. Seat....................... 1 Year.................. Not Guaranteed
(Discretionary
Seat).
Class with Terms Expiring Dec. 31, 2002 (4 seats):
Mass./Conn./Maine/Rhode Island Seat (board to pick 1 of 4)
Mass. Seat
Conn. Seat (not guaranteed by statute)
Mass. Seat (not guaranteed by statute)
Class with Terms Expiring Dec. 31, 2003 (3 seats):
Mass./Conn./Maine/Rhode Island Seat (board to pick 3 of 4)
Class with Terms Expiring Dec. 31, 2004 (3 seats):
Mass. Seat
N.H. Seat
Vermont Seat
----------------------------------------------------------------------------------------------------------------
Table 2
----------------------------------------------------------------------------------------------------------------
Guaranteed staggering: 3-
N.Y. FHLBank (11 Seats: 9 Guaranteed Term Non-guaranteed seats 3-3 Total staggering: 3-
by Statute and 2 Not Guaranteed) 4-4
----------------------------------------------------------------------------------------------------------------
7 Seats to be filled in 2000
election:
New York Seat.................... 3 Years.................
New Jersey Seat.................. 3 Years.................
Puerto Rico Seat................. 3 Years.................
New York Seat.................... 3 Years................. Not Guaranteed (Stock
Seat).
New York Seat.................... 2 Years.................
New York Seat.................... 2 Years.................
New Jersey Seat.................. 2 Years.................
4 Seats to be filled in 2001
election:
New York Seat.................... 3 Years.................
New York Seat.................... 3 Years................. Not Guaranteed (Stock
Seat).
New Jersey Seat.................. 3 Years.................
New Jersey Seat.................. 3 Years ................
Class with Terms Expiring Dec. 31, 2002 (3 seats):
New York Seat
New York Seat
New Jersey Seat
Class with Terms Expiring Dec. 31, 2003 (4 seats):
New York Seat
New York Seat (not guaranteed by statute)
New Jersey Seat
Puerto Rico Seat
Class with Terms Expiring Dec. 31, 2004 (4 seats):
New York Seat
New York Seat (not guaranteed by statute)
New Jersey Seat
New Jersey Seat
----------------------------------------------------------------------------------------------------------------
[[Page 88]]
Table 3
----------------------------------------------------------------------------------------------------------------
Guaranteed staggering: 2-
Pitts. FHLBank (8 seats: all Term Non-guaranteed seats 3-3 Total staggering: 2-
guaranteed by statute) 3-3
----------------------------------------------------------------------------------------------------------------
4 Seats to be filled in 2000
Election:
Penn. Seat....................... 3 Years.
Penn. Seat....................... 3 Years.
Penn. Seat....................... 3 Years.
Penn. Seat....................... 2 Years.
4 Seats to be filled in 2001 Election
West Va. Seat.................... 3 Years.
Delaware Seat.................... 3 Years.
Penn. Seat....................... 3 Years.
Penn. Seat....................... 1 Year.
Class with Terms Expiring Dec. 31, 2002 (2 seats):
Penn. Seat
Penn Seat
Class with Terms Expiring Dec. 31, 2003 (3 seats):
Penn. Seat
Penn. Seat
Penn. Seat
Class with Terms Expiring Dec. 31, 2004 (3 seats):
Penn. Seat
Delaware Seat
West Va. Seat
----------------------------------------------------------------------------------------------------------------
Table 4
----------------------------------------------------------------------------------------------------------------
Atlanta FHLBank (9 Seats: 8 Guaranteed staggering: 2-
guaranteed by statute and 1 not Term Non-guaranteed seats 3-3 Total staggering: 3-
guaranteed) 3-3
----------------------------------------------------------------------------------------------------------------
4 Seats to be filled in 2000
Election:
* Board must allocate 1
Seat to a 2-year term.
D.C. Seat........................ 3/2 Years*.
Alabama Seat..................... 3/2 Years*.
Virginia Seat.................... 3/2 Years*.
S. Carolina Seat................. 3/2 Years*.
5 Seats to be filled in 2001
Election:
* Board must allocate 1
Seat to a 1-year term
N. Carolina Seat................. 3/1 Years*.
Georgia Seat..................... 3/1 Years*.
Maryland Seat.................... 3/1 Years*.
Florida Seat..................... 3/1 Years*.
N. Carolina Seat................. 1 Year*................. Not Guaranteed
(Discretionary
Seat).
Class with Terms Expiring Dec. 31, 2002 (3 seats):
North Carolina Seat (not guaranteed by statute)
D.C./Alabama/Virginia/So. Carolina Seat (board to pick 1 of 4)
No. Carolina/Georgia/Maryland/Florida Seat (board to pick 1 of 4)
Class with Terms Expiring Dec. 31, 2003 (3 seats):
D.C./Alabama/Virginia/So. Carolina Seat (board to pick 3 of 4)
Class with Terms Expiring Dec. 31, 2004 (3 seats):
No. Carolina/Georgia/Maryland/Florida Seat (board to pick 3 of 4)
----------------------------------------------------------------------------------------------------------------
Table 5
----------------------------------------------------------------------------------------------------------------
Cincinnati FHLBank (9 seats: 8 Guaranteed staggering: 2-
guaranteed by statute and 1 not Term Non-guaranteed seats 3-3 Total staggering: 3-
guaranteed) 3-3
----------------------------------------------------------------------------------------------------------------
4 Seats to be filled in 2000
Election:
* Board must allocate 1
Seat to a 2-year term.
Kentucky Seat.................... 3 Years.
Ohio Seat........................ 3 Years.
[[Page 89]]
Kentucky Seat.................... 3/2 Years *.
Ohio Seat........................ 3/2 Years *.
5 Seats to be filled in 2001
Election:
* Board must allocate 1
Seat to a 1-year term.
Ohio Seat........................ 3 Years.
Tennessee Seat................... 3 Years.
Tennessee Seat................... 3/1 Years *.
Ohio Seat........................ 3/1 Years *.
Ohio Seat........................ 1 Year.................. Not Guaranteed (Stock
Seat).
Class with Terms Expiring Dec. 31, 2002 (3 seats):
Kentucky or Ohio Seat (board to decide)
Ohio Seat (not guaranteed by statute)
Tennessee or Ohio Seat (board to decide)
Class with Terms Expiring Dec. 31, 2003 (3 seats):
Kentucky Seat
Ohio Seat
Kentucky or Ohio Seat (board to decide)
Class with Terms Expiring Dec. 31, 2004 (3 seats):
Ohio Seat
Tennessee Seat
Tennessee or Ohio Seat (board to decide)
----------------------------------------------------------------------------------------------------------------
Table 6
----------------------------------------------------------------------------------------------------------------
Indianapolis FHLBank (10 seats: 8 Guaranteed staggering: 2-
guaranteed by statute and 2 not Term Non-guaranteed seats 3-3 Total staggering: 4-
guaranteed) 3-3
----------------------------------------------------------------------------------------------------------------
4 Seats to be filled in 2000
Election:
Indiana Seat..................... 3 Years.
Indiana Seat..................... 3 Years.
Michigan Seat.................... 3 Years.
Indiana Seat..................... 2 Years.
6 Seats to be filled in 2001
Election:
* Board must allocate 1
Seat to a 1-year term.
Michigan Seat.................... 3 Years.
Indiana Seat..................... 3 Years.
Michigan Seat.................... 3/1 Years *.
Indiana Seat..................... 3/1 Years *.
Michigan Seat.................... 1 Year.................. Not Guaranteed (Stock
Seat).
Michigan Seat.................... 1 Year.................. Not Guaranteed (Stock
Seat).
Class with Terms Expiring Dec. 31, 2002 (4 seats):
Indiana Seat.
Michigan or Indiana Seat (board to decide).
Michigan Seat (not guaranteed by statute).
Michigan Seat (not guaranteed by statute).
Class with Terms Expiring Dec. 31, 2003 (3 seats).
Indiana Seat.
Indiana Seat.
Michigan Seat.
Class with Terms Expiring Dec. 31, 2004 (3 seats).
Michigan Seat.
Indiana Seat.
Michigan or Indiana Seat (board to decide).
----------------------------------------------------------------------------------------------------------------
[[Page 90]]
Table 7
----------------------------------------------------------------------------------------------------------------
Chicago FHLBank (10 seats: 8 Guaranteed staggering: 2-
guaranteed by statute and 2 not Term Non-guaranteed seats 3-3 Total staggering: 4-
guaranteed) 3-3
----------------------------------------------------------------------------------------------------------------
4 Seats to be filled in 2000
Election:
Illinois Seat.................... 3 Years.
Wisconsin Seat................... 3 Years.
Wisconsin Seat................... 3 Years.
Wisconsin Seat................... 2 Years.
6 Seats to be filled in 2001
Election:
Wisconsin Seat................... 3 Years.
Illinois Seat.................... 3 Years.
Illinois Seat.................... 3 Years.
Illinois Seat.................... 1 Year.
Illinois Seat.................... 1 Year.................. Not Guaranteed (Stock
Seat).
Illinois Seat.................... 1 Year.................. Not Guaranteed (Stock
Seat).
Class with Terms Expiring Dec. 31, 2002 (4 seats)
Wisconsin Seat
Illinois Seat
Illinois Seat (not guaranteed by statute)
Illinois Seat (not guaranteed by statute)
Class with Terms Expiring Dec. 31, 2003 (3 seats)
Illinois Seat
Wisconsin Seat
Wisconsin Seat
Class with Terms Expiring Dec. 31, 2004 (3 seats)
Wisconsin Seat
Illinois Seat
Illinois Seat
----------------------------------------------------------------------------------------------------------------
Table 8
----------------------------------------------------------------------------------------------------------------
Des Moines Bank (10 seats: 8 Guaranteed staggering: 2-
guaranteed by statute and 2 not Term Non-guaranteed seats 3-3 Total staggering: 4-
guaranteed) 3-3
----------------------------------------------------------------------------------------------------------------
6 Seats to be filled in 2000
Election:
* Board must allocate 1
Seat to a 2-year term
Missouri Seat.................... 3/2 Years*.
South Dakota Seat................ 3/2 Years*.
Iowa Seat........................ 3/2 Years*.
Minnesota Seat................... 3/2 Years*.
Iowa Seat........................ 2 Years.
Minnesota Seat................... 2 Years................. Not Guaranteed (Stock
Seat).
4 Seats to be filled in 2001
Election:
Missouri Seat.................... 3 Years.
Minnesota Seat................... 3 Years.
North Dakota Seat................ 3 Years.
Missouri Seat.................... 1 Year.................. Not Guaranteed
(Discretionary
Seat).
Class with Terms Expiring Dec. 31, 2002 (4 seats):
Iowa Seat
Missouri/So.Dakota/Iowa/Minnesota Seat (board to pick 1 of 4)
Minnesota Seat (not guaranteed by statute)
Missouri Seat (not guaranteed by statute)
Class with Terms Expiring Dec. 31, 2003 (3 seats):
Missouri/So. Dakota/Iowa/Minnesota Seat (board to pick 3 of 4)
Class with Terms Expiring Dec. 31, 2004 (3 seats):
Missouri Seat
Minnesota Seat
North Dakota Seat
----------------------------------------------------------------------------------------------------------------
[[Page 91]]
Table 9
----------------------------------------------------------------------------------------------------------------
Dallas FHLBank (9 seats: 8 Guaranteed staggering: 2-
guaranteed by statute and 1 not Term Non-guaranteed seats 3-3 Total staggering: 3-
guaranteed) 3-3
----------------------------------------------------------------------------------------------------------------
4 Seats to be filled in 2000
Election:
Texas Seat....................... 3 Years.
Louisiana Seat................... 3 Years.
Arkansas Seat.................... 3 Years.
Louisiana Seat................... 2 Years.
5 Seats to be filled in 2001
Election:
Texas Seat....................... 3 Years.
Mississippi Seat................. 3 Years.
New Mexico Seat.................. 3 Years.
Texas Seat....................... 1 Year.
Texas Seat....................... 1 Year.................. Not Guaranteed (Stock
Seat).
Class with Terms Expiring Dec. 31, 2002 (3 seats):
Louisiana Seat
Texas Seat
Texas Seat (not guaranteed by statute)
Class with Terms Expiring Dec. 31, 2003 (3 seats):
Texas Seat
Louisiana Seat
Arkansas Seat
Class with Terms Expiring Dec. 31, 2004 (3 seats):
Texas Seat
Mississippi Seat
New Mexico Seat
----------------------------------------------------------------------------------------------------------------
Table 10
----------------------------------------------------------------------------------------------------------------
Topeka FHLBank (10 seats: 8 Guaranteed staggering: 2-
guaranteed by statute and 2 not Term Non-Guaranteed seats 3-3 Total staggering: 4-
guaranteed) 3-3
----------------------------------------------------------------------------------------------------------------
5 Seats to be filled in 2000
Election:
Colorado Seat.................... 3 Years.
Oklahoma Seat.................... 3 Years.
Kansas Seat...................... 3 Years.
Colorado Seat.................... 2 Years.
Kansas Seat...................... 2 Years.
5 Seats to be filled in 2001
Election:
Kansas Seat...................... 3 Years.
Oklahoma Seat.................... 3 Years.
Nebraska Seat.................... 3 Years.
Nebraska Seat.................... 1 Year.................. Not Guaranteed (Stock
Seat).
Nebraska Seat.................... 1 Year.................. Not Guaranteed (Stock
Seat).
Class with Terms Expiring Dec. 31, 2002 (4 seats):
Colorado Seat
Kansas Seat
Nebraska Seat (not guaranteed by statute)
Nebraska Seat (not guaranteed by statute)
Class with Terms Expiring Dec. 31, 2003 (3 seats):
Colorado Seat
Oklahoma Seat
Kansas Seat
Class with Terms Expiring Dec. 31, 2004 (3 seats):
Kansas Seat
Oklahoma Seat
Nebraska Seat
----------------------------------------------------------------------------------------------------------------
[[Page 92]]
Table 11
----------------------------------------------------------------------------------------------------------------
San Francisco FHLBank (8 seats: 5 Guaranteed staggering: 1-
guaranteed by statute and 3 not Terms Non-guaranteed seats 2-2 Total staggering: 2-
guaranteed) 3-3
----------------------------------------------------------------------------------------------------------------
4 Seats to be filled in 2000
Election:
California Seat.................. 3 Years.
California Seat.................. 3 Years.
California Seat.................. 3 Years................. Not Guaranteed (Stock
Seat).
California Seat.................. 2 Years................. Not Guaranteed (Stock
Seat).
4 Seats to be filled in 2001
Election:
*Board must allocate 1
seat to a 1-year term
California Seat.................. 3/1 Years*.
Nevada Seat...................... 3/1 Years*.
Arizona Seat..................... 3/1 Years*.
California Seat.................. 1 Year.................. Not Guaranteed (Stock
Seat).
Class with Terms Expiring Dec. 31, 2002 (3 seats):
California/Nevada/Arizona Seat (board to pick 1 of 3)
California Seat (not guaranteed by statute)
California Seat (not guaranteed by statute)
Class with Terms Expiring Dec. 31, 2003 (3 seats):
California Seat
California Seat
California Seat (not guaranteed by statute)
Class with Terms Expiring Dec. 31, 2004 (2 seats):
California/Nevada/Arizona Seat (board to pick 2 of 3)
----------------------------------------------------------------------------------------------------------------
Table 12
----------------------------------------------------------------------------------------------------------------
Seattle FHLBank (10 seats: 8 Guaranteed staggering: 2-
guaranteed by statute and 2 not Term Non-guaranteed seats 3-3 Total staggering: 4-
guaranteed) 3-3
----------------------------------------------------------------------------------------------------------------
5 Seats to be filled in 2000
Election:
Hawaii Seat...................... 3 Years.
Utah Seat........................ 3 Years.
Alaska Seat...................... 3 Years.
Washington Seat.................. 2 Years................. Not Guaranteed
(Discretionary
Seat).
Washington Seat.................. 2 Years................. Not Guaranteed
(Discretionary
Seat).
5 Seats to be filled in 2001
Election:
* Board must allocate 2
seats to 1-year terms
Montana Seat..................... 3/1 Years*.
Oregon Seat...................... 3/1 Years*.
Washington Seat.................. 3/1 Years*.
Idaho Seat....................... 3/1 Years*.
Wyoming Seat..................... 3/1 Years*.
Class with Terms Expiring Dec. 31, 2002 (4 seats):
Montana/Oregon/Idaho/Wyoming/Washington Seat (board to pick 2 of 5)
Washington Seat (not guaranteed by statute)
Washington Seat (not guaranteed by statute)
Class with Terms Expiring Dec. 31, 2003 (3 seats):
Hawaii Seat
Utah Seat
Alaska Seat
Class with Terms Expiring Dec. 31, 2004 (3 seats):
Montana/Oregon/Idaho/Wyoming/Washington Seat (board to pick 3 of 5)
----------------------------------------------------------------------------------------------------------------
[65 FR 41570, July 6, 2000]
[[Page 93]]
PART 917_POWERS AND RESPONSIBILITIES OF BANK BOARDS OF DIRECTORS AND
SENIOR MANAGEMENT--Table of Contents
Sec.
917.1 Definitions.
917.2 General authorities and duties of Bank boards of directors.
917.3 Risk management.
917.4 Bank Member Products Policy.
917.5 Strategic business plan.
917.6 Internal control system.
917.7 Audit committees.
917.8 Budget preparation.
917.9 Dividends.
917.10 Bank bylaws.
Authority: 12 U.S.C. 1422a(a)(3), 1422b(a)(1), 1426, 1427, 1432(a),
1436(a), 1440.
Source: 65 FR 25274, May 1, 2000, unless otherwise noted.
Sec. 917.1 Definitions.
As used in this part:
Business risk means the risk of an adverse impact on a Bank's
profitability resulting from external factors as may occur in both the
short and long run.
Community financial institution has the meaning set forth in Sec.
925.1 of this chapter.
Contingency liquidity means the sources of cash a Bank may use to
meet its operational requirements when its access to the capital markets
is impeded, and includes:
(1) Marketable assets with a maturity of one year or less;
(2) Self-liquidating assets with a maturity of seven days or less;
(3) Assets that are generally accepted as collateral in the
repurchase agreement market; and
(4) Irrevocable lines of credit from financial institutions rated
not lower than the second highest credit rating category by an NRSRO.
Credit risk means the risk that the market value, or estimated fair
value if market value is not available, of an obligation will decline as
a result of deterioration in creditworthiness.
Immediate family member means a parent, sibling, spouse, child,
dependent, or any relative sharing the same residence.
Internal auditor means the individual responsible for the internal
audit function at the Bank.
Liquidity risk means the risk that a Bank will be unable to meet its
obligations as they come due or meet the credit needs of its members and
associates in a timely and cost-efficient manner.
Market risk means the risk that the market value, or estimated fair
value if market value is not available, of a Bank's portfolio will
decline as a result of changes in interest rates, foreign exchange
rates, equity and commodity prices.
Operational liquidity means sources of cash from both a Bank's
ongoing access to the capital markets and its holding of liquid assets
to meet operational requirements in a Bank's normal course of business.
Operations risk means the risk of an unexpected loss to a Bank
resulting from human error, fraud, unenforceability of legal contracts,
or deficiencies in internal controls or information systems.
Reportable conditions means matters that represent significant
deficiencies in the design or operation of the internal control system
that could adversely affect a Bank's ability to record, process,
summarize and report financial data consistent with the assertions of
management.
[65 FR 25274, May 1, 2000, as amended at 67 FR 12846, Mar. 20, 2002]
Sec. 917.2 General authorities and duties of Bank boards of directors.
(a) Management of a Bank. The management of each Bank shall be
vested in its board of directors. While Bank boards of directors may
delegate the execution of operational functions to Bank personnel, the
ultimate responsibility of each Bank's board of directors for that
Bank's management is non-delegable.
(b) Duties of Bank directors. Each Bank director shall have the duty
to:
(1) Carry out his or her duties as director in good faith, in a
manner such director believes to be in the best interests of the Bank,
and with such care, including reasonable inquiry, as an ordinarily
prudent person in a like position would use under similar circumstances;
[[Page 94]]
(2) Administer the affairs of the Bank fairly and impartially and
without discrimination in favor of or against any member;
(3) At the time of appointment or election, or within a reasonable
time thereafter, have a working familiarity with basic finance and
accounting practices, including the ability to read and understand the
Bank's balance sheet and income statement and to ask substantive
questions of management and the internal and external auditors; and
(4) Direct the operations of the Bank in conformity with the
requirements set forth in the Act and this chapter.
(c) Authority regarding staff and outside consultants. (1) In
carrying out its duties and responsibilities under the Act and this
chapter, each Bank's board of directors and all committees thereof shall
have authority to retain staff and outside counsel, independent
accountants, or other outside consultants at the expense of the Bank.
(2) Bank staff providing services to the board of directors or any
committee of the board under paragraph (c)(1) of this section may be
required by the board of directors or such committee to report directly
to the board or such committee, as appropriate.
Sec. 917.3 Risk management.
(a) Risk management policy. (1) Adoption. Beginning August 29, 2000,
each Bank's board of directors shall have in effect at all times a risk
management policy that addresses the Bank's exposure to credit risk,
market risk, liquidity risk, business risk and operations risk and that
conforms to the requirements of paragraph (b) of this section and to all
applicable Finance Board regulations and policies.
(2) Review and compliance. Each Bank's board of directors shall:
(i) Review the Bank's risk management policy at least annually;
(ii) Amend the risk management policy as appropriate;
(iii) Re-adopt the Bank's risk management policy, including interim
amendments, not less often than every three years; and
(iv) Ensure that policies and procedures are in place that are
reasonably designed to achieve continuing Bank compliance with the risk
management policy.
(b) Risk management policy requirements. In addition to meeting any
other requirements set forth in this chapter, each Bank's risk
management policy shall:
(1) After the Finance Board has approved a Bank's capital plan, but
before the plan takes effect, the Bank shall amend its risk management
policy to describe the specific steps the Bank will take to comply with
its capital plan and to include specific target ratios of total capital
and permanent capital to total assets at which the Bank intends to
operate. The target operating capital-to-assets ratios to be specified
in the risk management policy shall be in excess of the minimum leverage
and risk-based capital ratios and may be expressed as a range of ratios
or as a single ratio;
(2) Set forth the Bank's tolerance levels for the market and credit
risk components; and
(3) Set forth standards for the Bank's management of each risk
component, including but not limited to:
(i) Regarding credit risk arising from all secured and unsecured
transactions, standards and criteria for, and timing of, periodic
assessment of the creditworthiness of issuers, obligors, or other
counterparties including identifying the criteria for selecting dealers,
brokers and other securities firms with which the Bank may execute
transactions;
(ii) Regarding market risk, standards for the methods and models
used to measure and monitor such risk;
(iii) Regarding day-to-day operational liquidity needs and
contingency liquidity needs:
(A) An enumeration of specific types of investments to be held for
such liquidity purposes; and
(B) The methodology to be used for determining the Bank's
operational and contingency liquidity needs;
(iv) Regarding operations risk, standards for an effective internal
control system, including periodic testing and reporting; and
(v) Regarding business risk, strategies for mitigating such risk,
including contingency plans where appropriate.
[[Page 95]]
(c) Risk assessment. The senior management of each Bank shall
perform, at least annually, a risk assessment that is reasonably
designed to identify and evaluate all material risks, including both
quantitative and qualitative aspects, that could adversely affect the
achievement of the Bank's performance objectives and compliance
requirements. The risk assessment shall be in written form and shall be
reviewed by the Bank's board of directors promptly upon its completion.
[65 FR 25274, May 1, 2000, as amended at 66 FR 8308, Jan. 30, 2001; 67
FR 12846, Mar. 20, 2002]
Sec. 917.4 Bank Member Products Policy.
(a) Adoption and review of member products policy--(1) Adoption.
Beginning November 15, 2000, each Bank's board of directors shall have
in effect at all times a policy that addresses the Bank's management of
products offered by the Bank to members and housing associates,
including but not limited to advances, standby letters of credit and
acquired member assets, consistent with the requirements of the Act,
paragraph (b) of this section, and all applicable Finance Board
regulations and policies.
(2) Review and compliance. Each Bank's board of directors shall:
(i) Review the Bank's member products policy annually;
(ii) Amend the member products policy as appropriate; and
(iii) Re-adopt the member products policy, including interim
amendments, not less often than every three years.
(b) Member products policy requirements. In addition to meeting any
other requirements set forth in this chapter, each Bank's member
products policy shall:
(1) Address credit underwriting criteria to be applied in evaluating
applications for advances, standby letters of credit, and renewals;
(2) Address appropriate levels of collateralization, valuation of
collateral and discounts applied to collateral values for advances and
standby letters of credit;
(3) Address advances-related fees to be charged by each Bank,
including any schedules or formulas pertaining to such fees;
(4) Address standards and criteria for pricing member products,
including differential pricing of advances pursuant to Sec. 950.5(b)(2)
of this chapter, and criteria regarding the pricing of standby letters
of credit, including any special pricing provisions for standby letters
of credit that facilitate the financing of projects that are eligible
for any of the Banks' CICA programs under part 952 of this chapter;
(5) Provide that, for any draw made by a beneficiary under a standby
letter of credit, the member will be charged a processing fee calculated
in accordance with the requirements of Sec. 975.6(b) of this chapter;
(6) Address the maintenance of appropriate systems, procedures and
internal controls; and
(7) Address the maintenance of appropriate operational and personnel
capacity.
[65 FR 44426, July 18, 2000, as amended at 67 FR 12846, Mar. 20, 2002]
Sec. 917.5 Strategic business plan.
(a) Adoption of strategic business plan. Beginning on July 30, 2000,
each Bank's board of directors shall have in effect at all times a
strategic business plan that describes how the business activities of
the Bank will achieve the mission of the Bank consistent with part 940
of this chapter. Specifically, each Bank's strategic business plan
shall:
(1) Enumerate operating goals and objectives for each major business
activity and for all new business activities, which must include plans
for maximizing activities that enhance the carrying out of the mission
of the Bank, consistent with part 940 of this chapter;
(2) Discuss how the Bank will:
(i) Address credit needs and market opportunities identified through
ongoing market research and consultations with members, associates and
public and private organizations; and
(ii) Notify members and associates of relevant programs and
initiatives;
(3) Establish quantitative performance goals for Bank products
related to multi-family housing, small business, small farm and small
agri-business lending;
[[Page 96]]
(4) Describe any proposed new business activities or enhancements of
existing activities; and
(5) Be supported by appropriate and timely research and analysis of
relevant market developments and member and associate demand for Bank
products and services.
(b) Review and monitoring. Each Bank's board of directors shall:
(1) Review the Bank's strategic business plan at least annually;
(2) Amend the strategic business plan as appropriate;
(3) Re-adopt the Bank's strategic business plan, including interim
amendments, not less often than every three years; and
(4) Establish management reporting requirements and monitor
implementation of the strategic business plan and the operating goals
and objectives contained therein.
(c) Report to Finance Board. Each Bank shall submit to the Finance
Board annually a report analyzing and describing the Bank's performance
in achieving the goals described in paragraph (a)(3) of this section.
[65 FR 25274, May 1, 2000, as amended at 67 FR 12846, Mar. 20, 2002]
Sec. 917.6 Internal control system.
(a) Establishment and maintenance. (1) Each Bank shall establish and
maintain an effective internal control system that addresses:
(i) The efficiency and effectiveness of Bank activities;
(ii) The safeguarding of Bank assets;
(iii) The reliability, completeness and timely reporting of
financial and management information and transparency of such
information to the Bank's board of directors and to the Finance Board;
and
(iv) Compliance with applicable laws, regulations, policies,
supervisory determinations and directives of the Bank's board of
directors and senior management.
(2) Ongoing internal control activities necessary to maintain the
internal control system required under paragraph (a)(1) of this section
shall include, but are not limited to:
(i) Top level reviews by the Bank's board of directors and senior
management, including review of financial presentations and performance
reports;
(ii) Activity controls, including review of standard performance and
exception reports by department-level management on an appropriate
periodic basis;
(iii) Physical and procedural controls to safeguard, and prevent the
unauthorized use of, assets;
(iv) Monitoring for compliance with the risk tolerance limits set
forth in the Bank's risk management policy;
(v) Any required approvals and authorizations for specific
activities; and
(vi) Any required verifications and reconciliations for specific
activities.
(b) Internal control responsibilities of Banks' boards of directors.
Each Bank's board of directors shall ensure that the internal control
system required under paragraph (a)(1) of this section is established
and maintained, and shall oversee senior management's implementation of
such a system on an ongoing basis, by:
(1) Conducting periodic discussions with senior management regarding
the effectiveness of the internal control system;
(2) Ensuring that an internal audit of the internal control system
is performed annually and that such annual audit is reasonably designed
to be effective and comprehensive;
(3) Requiring that internal control deficiencies be reported to the
Bank's board of directors in a timely manner and that such deficiencies
are addressed promptly;
(4) Conducting a timely review of evaluations of the effectiveness
of the internal control system made by internal auditors, external
auditors and Finance Board examiners;
(5) Directing senior management to address promptly and effectively
recommendations and concerns expressed by internal auditors, external
auditors and Finance Board examiners regarding weaknesses in the
internal control system;
(6) Reporting any internal control deficiencies found, and the
corrective action taken, to the Finance Board in a timely manner;
(7) Establishing, documenting and communicating an organizational
structure that clearly shows lines of
[[Page 97]]
authority within the Bank, provides for effective communication
throughout the Bank, and ensures that there are no gaps in the lines of
authority;
(8) Reviewing all delegations of authority to specific personnel or
committees and requiring that such delegations state the extent of the
authority and responsibilities delegated; and
(9) Establishing reporting requirements, including specifying the
nature and frequency of reports it receives.
(c) Internal control responsibilities of Banks' senior management.
Each Bank's senior management shall be responsible for carrying out the
directives of the Bank's board of directors, including the
establishment, implementation and maintenance of the internal control
system required under paragraph (a)(1) of this section, by:
(1) Establishing, implementing and effectively communicating to Bank
personnel policies and procedures that are adequate to ensure that
internal control activities necessary to maintain an effective internal
control system, including the activities enumerated in paragraph (a)(2)
of this section, are an integral part of the daily functions of all Bank
personnel;
(2) Ensuring that all Bank personnel fully understand and comply
with all policies, procedures and legal requirements applicable to their
positions and responsibilities;
(3) Ensuring that there is appropriate segregation of duties among
Bank personnel and that personnel are not assigned conflicting
responsibilities;
(4) Establishing effective paths of communication upward, downward
and across the organization in order to ensure that Bank personnel
receive necessary and appropriate information, including:
(i) Information relating to the operational policies and procedures
of the Bank;
(ii) Information relating to the actual operational performance of
the Bank;
(iii) Adequate and comprehensive internal financial, operational and
compliance data; and
(iv) External market information about events and conditions that
are relevant to decision making;
(5) Developing and implementing procedures that translate the major
business strategies and policies established by the Bank's board of
directors into operating standards;
(6) Ensuring adherence to the lines of authority and responsibility
established by the Bank's board of directors;
(7) Overseeing the implementation and maintenance of management
information and other systems;
(8) Establishing and implementing an effective system to track
internal control weaknesses and the actions taken to correct them; and
(9) Monitoring and reporting to the Bank's board of directors the
effectiveness of the internal control system on an ongoing basis.
[65 FR 25274, May 1, 2000, as amended at 67 FR 12846, Mar. 20, 2002]
Sec. 917.7 Audit committees.
(a) Establishment. The board of directors of each Bank shall
establish an audit committee, consistent with the requirements set forth
in this section.
(b) Composition. (1) The audit committee shall comprise five or more
persons drawn from the Bank's board of directors, each of whom shall
meet the criteria of independence set forth in paragraph (c) of this
section.
(2) The audit committee shall include a balance of representatives
of:
(i) Community financial institutions and other members; and
(ii) Appointive and elective directors of the Bank.
(3) The terms of audit committee members shall be appropriately
staggered so as to provide for continuity of service.
(4) At least one member of the audit committee shall have extensive
accounting or related financial management experience.
(c) Independence. Any member of the Bank's board of directors shall
be considered to be sufficiently independent to serve as a member of the
audit committee if that director does not have a disqualifying
relationship with the Bank or its management that would interfere with
the exercise of that director's independent judgment. Such disqualifying
relationships include, but are not limited to:
[[Page 98]]
(1) Being employed by the Bank in the current year or any of the
past five years;
(2) Accepting any compensation from the Bank other than compensation
for service as a board director;
(3) Serving or having served in any of the past five years as a
consultant, advisor, promoter, underwriter, or legal counsel of or to
the Bank; or
(4) Being an immediate family member of an individual who is, or has
been in any of the past five years, employed by the Bank as an executive
officer.
(d) Charter. (1) The audit committee of each Bank shall adopt, and
the Bank's board of directors shall approve, a formal written charter
that specifies the scope of the audit committee's powers and
responsibilities, as well as the audit committee's structure, processes
and membership requirements.
(2) The audit committee and the board of directors of each Bank
shall:
(i) Review, assess the adequacy of and, where appropriate, amend the
Bank's audit committee charter on an annual basis;
(ii) Amend the audit committee charter as appropriate; and
(iii) Re-adopt and re-approve, respectively, the Bank's audit
committee charter not less often than every three years.
(3) Each Bank's audit committee charter shall:
(i) Provide that the audit committee has the responsibility to
select, evaluate and, where appropriate, replace the internal auditor
and that the internal auditor may be removed only with the approval of
the audit committee;
(ii) Provide that the internal auditor shall report directly to the
audit committee on substantive matters and that the internal auditor is
ultimately accountable to the audit committee and board of directors;
and
(iii) Provide that both the internal auditor and the external
auditor shall have unrestricted access to the audit committee without
the need for any prior management knowledge or approval.
(e) Duties. Each Bank's audit committee shall have the duty to:
(1) Direct senior management to maintain the reliability and
integrity of the accounting policies and financial reporting and
disclosure practices of the Bank;
(2) Review the basis for the Bank's financial statements and the
external auditor's opinion rendered with respect to such financial
statements (including the nature and extent of any significant changes
in accounting principles or the application therein) and ensure that
policies are in place that are reasonably designed to achieve disclosure
and transparency regarding the Bank's true financial performance and
governance practices;
(3) Oversee the internal audit function by:
(i) Reviewing the scope of audit services required, significant
accounting policies, significant risks and exposures, audit activities
and audit findings;
(ii) Assessing the performance and determining the compensation of
the internal auditor; and
(iii) Reviewing and approving the internal auditor's work plan;
(4) Oversee the external audit function by:
(i) Approving the external auditor's annual engagement letter;
(ii) Reviewing the performance of the external auditor; and
(iii) Making recommendations to the Bank's board of directors
regarding the appointment, renewal, or termination of the external
auditor;
(5) Provide an independent, direct channel of communication between
the Bank's board of directors and the internal and external auditors;
(6) Conduct or authorize investigations into any matters within the
audit committee's scope of responsibilities;
(7) Ensure that senior management has established and is maintaining
an adequate internal control system within the Bank by:
(i) Reviewing the Bank's internal control system and the resolution
of identified material weaknesses and reportable conditions in the
internal control system, including the prevention or detection of
management override or compromise of the internal control system; and
(ii) Reviewing the programs and policies of the Bank designed to
ensure
[[Page 99]]
compliance with applicable laws, regulations and policies and monitoring
the results of these compliance efforts;
(8) Review the policies and procedures established by senior
management to assess and monitor implementation of the Bank's strategic
business plan and the operating goals and objectives contained therein;
and
(9) Report periodically its findings to the Bank's board of
directors.
(f) Meetings. The audit committee shall prepare written minutes of
each audit committee meeting.
[65 FR 25274, May 1, 2000, as amended at 67 FR 12846, Mar. 20, 2002]
Sec. 917.8 Budget preparation.
(a) Adoption of budgets. Each Bank's board of directors shall be
responsible for the adoption of an annual operating expense budget and a
capital expenditures budget for the Bank, and any subsequent amendments
thereto, consistent with the requirements of the Act, this section,
other regulations and policies of the Finance Board, and with the Bank's
responsibility to protect both its members and the public interest by
keeping its costs to an efficient and effective minimum.
(b) No delegation of budget authority. A Bank's board of directors
may not delegate the authority to approve the Bank's annual budgets, or
any subsequent amendments thereto, to Bank officers or other Bank
employees.
(c) Interest rate scenario. A Bank's annual budgets shall be
prepared based upon an interest rate scenario as determined by the Bank.
(d) Board approval for deviations. A Bank may not exceed its total
annual operating expense budget or its total annual capital expenditures
budget without prior approval by the Bank's board of directors of an
amendment to such budget.
Sec. 917.9 Dividends.
(a) A Bank's board of directors may declare and pay a dividend only
from previously retained earnings or current net earnings and only if
such payment will not result in a projected impairment of the par value
of the capital stock of the Bank. Dividends on such capital stock shall
be computed without preference.
(b) The requirement in paragraph (a) of this section that dividends
shall be computed without preference shall cease to apply to any Bank
that has established any dividend preferences for one or more classes or
subclasses of its capital stock as part of its approved capital plan, as
of the date on which the capital plan takes effect.
[65 FR 25274, May 1, 2000, as amdended at 66 FR 8308, Jan. 30, 2001]
Sec. 917.10 Bank bylaws.
A Bank's board of directors shall have in effect at all times bylaws
governing the manner in which the Bank administers its affairs and such
bylaws shall be consistent with applicable laws and regulations as
administered by the Finance Board.
PART 918_BANK DIRECTOR COMPENSATION AND EXPENSES--Table of Contents
Sec.
918.1 Definitions.
918.2 Annual directors' compensation policy.
918.3 Directors' compensation policy requirements.
918.4 Directors' expenses.
918.5 Approval by Finance Board.
918.6 Disclosure.
918.7 Maintenance of effort.
918.8 Site of board of directors and committee meetings.
918.9 Date of applicability of removal of requirements regarding
compensation of bank officers and employees.
Authority: 12 U.S.C. 1422b(a), 1427.
Source: 65 FR 8260, Feb. 18, 2000, unless otherwise noted.
Sec. 918.1 Definitions.
As used in this part:
Compensation means any payment of money or provision of any other
thing of value (or the accrual of a right to receive money or a thing of
value in a subsequent year) in consideration of a director's performance
of official duties for the Bank, including, without limitation, daily
meeting fees, incentive payments and fringe benefits.
Sec. 918.2 Annual directors' compensation policy.
Beginning in 2000 and annually thereafter, each Bank's board of
directors
[[Page 100]]
shall adopt by resolution a written policy to provide for the payment to
Bank directors of reasonable compensation for the performance of their
duties as members of the Bank's board of directors, subject to the
requirements set forth in Sec. 918.3. At a minimum, such policy shall
address the activities or functions for which attendance is necessary
and appropriate and may be compensated, and shall explain and justify
the methodology for determining the amount of compensation to be paid to
directors.
[65 FR 8260, Feb. 18, 2000]
Sec. 918.3 Compensation policy requirements.
Payment to directors under each Bank's policy on director
compensation may be based upon factors that the Bank determines to be
appropriate, but each Bank's policy shall conform to the following
requirements:
(a)(1) Statutory limits on annual compensation. Pursuant to section
7(i) of the Act (12 U.S.C. 1427(i)), for 2000, the following limits on
compensation shall apply: for a Chairperson--$25,000; for a Vice
Chairperson--$20,000; for any other member of the Bank's board of
directors--$15,000. Beginning in 2001 and for subsequent years, these
limits on annual compensation shall be adjusted annually by the Finance
Board to reflect any percentage increase in the preceding year's
Consumer Price Index (CPI) for all urban consumers, as published by the
Department of Labor. Each year, as soon as practicable after the
publication of the previous year's CPI, the Finance Board shall publish
notice by Federal Register, distribution of a memorandum, or otherwise,
of the CPI-adjusted limits on annual compensation.
(2) Starting in 2000, the annual compensation limits set forth in
paragraph (a)(1) of this section shall apply to the year in which any
deferred compensation was accrued or earned by a director, and not to
the year in which it is paid to the director.
(b) Compensation permitted only for performance of official Bank
business. The total compensation received by each director in a year
shall reflect the amount of time spent on official Bank business, and
greater or lesser attendance at board and committee meetings during a
given year shall be reflected in the compensation received by the
director for that year. A Bank shall not pay a director who regularly
fails to attend board or committee meetings. A Bank shall not pay fees
to a director, such as retainer fees, that do not reflect the director's
performance of official Bank business conducted prior to the payment of
such fees.
[65 FR 8260, Feb. 18, 2000, as amended at 65 FR 13666, Mar. 14, 2000; 67
FR 12846, Mar. 20, 2002]
Sec. 918.4 Directors' expenses.
Each Bank may pay its directors for such necessary and reasonable
travel, subsistence and other related expenses incurred in connection
with the performance of their official duties as are payable to senior
officers of the Bank under the Bank's travel policy, except that
directors may not be paid for gift or entertainment expenses.
[65 FR 8260, Feb. 18, 2000]
Sec. 918.5 Approval by Finance Board.
Payments made to directors in compliance with the limits on annual
directors' compensation and the standards set forth in this section are
deemed to be approved by the Finance Board for purposes of section 7(i)
of the Act (12 U.S.C. 1427(i)).
[65 FR 8260, Feb. 18, 2000, as amended at 67 FR 12846, Mar. 20, 2002]
Sec. 918.6 Disclosure.
Each Bank shall, in its annual report:
(a) State the sum of the total actual compensation paid to its
directors in that year;
(b) State the sum of the total actual expenses paid to its directors
in that year; and
(c) Summarize its policy on director compensation.
Sec. 918.7 Maintenance of effort.
Notwithstanding the limits on annual directors' compensation
established by section 7(i) of the Act (12 U.S.C. 1427(i)), the board of
directors of each Bank shall continue to maintain its level of oversight
of the management of the Bank. In maintaining its
[[Page 101]]
level of oversight, the board of directors of a Bank shall hold at least
six in-person meetings in any year.
[66 FR 24264, May 14, 2001, as amended at 67 FR 12846, Mar. 20, 2002]
Sec. 918.8 Site of board of directors and committee meetings.
Meetings of a Bank's board of directors and committees thereof
usually should be held within the district served by the Bank. No
meetings of a Bank's board of directors and committees thereof may be
held in any location that is not within the United States, including its
possessions and territories.
Sec. 918.9 Date of applicability of removal of requirements regarding
compensation of bank officers and employees.
The removal of the requirements relating to compensation of Bank
officers and employees in former 12 CFR 932.19 (in the Code of Federal
Regulations revised as of January 1, 1999), is applicable for all Bank
officer and employee compensation years starting after December 21,
1999.
[65 FR 13666, Mar. 14, 2000, as amended at 67 FR 12846, Mar. 20, 2002]
[[Page 102]]
SUBCHAPTER D_FEDERAL HOME LOAN BANK MEMBERS AND HOUSING ASSOCIATES
PART 925_MEMBERS OF THE BANKS--Table of Contents
Subpart A_Definitions
Sec.
925.1 Definitions.
Subpart B_Membership Application Process
925.2 Membership application requirements.
925.3 Decision on application.
925.4 Automatic membership.
925.5 Appeals.
Subpart C_Eligibility Requirements
925.6 General eligibility requirements.
925.7 Duly organized requirement.
925.8 Subject to inspection and regulation requirement.
925.9 Makes long-term home mortgage loans requirement.
925.10 10 percent requirement for certain insured depository institution
applicants.
925.11 Financial condition requirement for applicants other than
insurance companies.
925.12 Character of management requirement.
925.13 Home financing policy requirement.
925.14 De novo insured depository institution applicants.
925.15 Recent merger or acquisition applicants.
925.16 Financial condition requirement for insurance company applicants.
925.17 Rebuttable presumptions.
925.18 Determination of appropriate Bank district for membership.
Subpart D_Stock Requirements
925.19 Par value and price of stock.
925.20 Stock purchase.
925.21 Issuance and form of stock.
925.22 Adjustments in stock holdings.
925.23 Purchase of excess stock.
Subpart E_Consolidations Involving Members
925.24 Consolidations involving members.
Subpart F_Withdrawal and Removal From Membership
925.26 Voluntary withdrawal from membership.
925.27 Involuntary termination of membership.
Subpart G_Orderly Liquidation of Advances and Redemption of Stock
925.29 Disposition of claims.
Subpart H_Reacquisition of Membership
925.30 Readmission to membership.
Subpart I_Bank Access to Information
925.31 Reports and examinations.
Subpart J_Membership Insignia
925.32 Official membership insignia.
Authority: 12 U.S.C. 1422, 1422a, 1422b, 1423, 1424, 1426, 1430,
1442.
Source: 58 FR 43542, Aug. 17, 1993, unless otherwise noted.
Redesignated at 65 FR 8256, Feb. 18, 2000.
Subpart A_Definitions
Sec. 925.1 Definitions.
For purposes of this part:
Adjusted net income means net income, excluding extraordinary items
such as income received from, or expense incurred in, sales of
securities or fixed assets, reported on a regulatory financial report.
Aggregate unpaid loan principal means the aggregate unpaid principal
of a subscriber's or member's home mortgage loans, home-purchase
contracts and similar obligations.
Allowance for loan and lease losses means a specified balance-sheet
account held to fund potential losses on loans or leases, that is
reported on a regulatory financial report.
Appropriate regulator means a regulatory entity listed in Sec.
925.8, as applicable.
Combination business or farm property means real property for which
the total appraised value is attributable to residential, and business
or farm uses.
Community financial institution or CFI means an institution:
(1) The deposits of which are insured under the Federal Deposit
Insurance Act (12 U.S.C. 1811, et seq.); and
[[Page 103]]
(2) That has, as of the date of the transaction at issue, less than
the community financial institution asset cap in total assets, based on
an average of total assets over three years, which shall be calculated
by the Bank based on the average of total assets drawn from the
institution's regulatory financial reports filed with its appropriate
regulator for the most recent calendar quarter and the immediately
preceding 11 calendar quarters.
Community financial institution asset cap means, for 2000, $500
million. Beginning in 2001 and for subsequent years, the cap shall be
adjusted annually by the Finance Board to reflect any percentage
increase in the preceding year's Consumer Price Index (CPI) for all
urban consumers, as published by the U.S. Department of Labor. Each
year, as soon as practicable after the publication of the previous
year's CPI, the Finance Board shall publish notice by the Federal
Register of the CPI-adjusted cap.
Composite regulatory examination rating means a composite rating
assigned to an institution following the guidelines of the Uniform
Financial Institutions Rating System (Issued by the Federal Financial
Institutions Examination Council; for availability contact the Federal
Housing Finance Board, FOIA Office, 1777 F Street, NW., Washington, DC
20006), including a CAMEL rating, a MACRO rating, or other similar
rating, contained in a written regulatory examination report.
Consolidation includes a consolidation, a merger, or a purchase of
all of the assets and assumption of all of the liabilities of an entity
by another entity.
Dwelling unit means a single room or a unified combination of rooms
designed for residential use.
Enforcement action means any written notice, directive, order or
agreement initiated by an applicant for Bank membership or by its
appropriate regulator to address any operational, financial, managerial
or other deficiencies of the applicant identified by such regulator, but
does not include a board of directors resolution adopted by the
applicant in response to examination weaknesses identified by such
regulator.
Funded residential construction loan means the portion of a loan
secured by real property made to finance the on-site construction of
dwelling units on one-to-four family property or multifamily property
disbursed to the borrower.
Home mortgage loan means:
(1) A loan, whether or not fully amortizing, or an interest in such
a loan, which is secured by a mortgage, deed of trust, or other security
agreement that creates a first lien on one of the following interests in
property:
(i) One-to-four family property or multifamily property, in fee
simple;
(ii) A leasehold on one-to-four family property or multifamily
property under a lease of not less than 99 years that is renewable, or
under a lease having a period of not less than 50 years to run from the
date the mortgage was executed; or
(iii) Combination business or farm property where at least 50
percent of the total appraised value of the combined property is
attributable to the residential portion of the property or, in the case
of any community financial institution, combination business or farm
property, on which is located a permanent structure actually used as a
residence (other than for temporary or seasonal housing), where the
residence constitutes an integral part of the property; or
(2) A mortgage pass-through security that represents an undivided
ownership interest in:
(i) Long-term loans, provided that, at the time of issuance of the
security, all of the loans meet the requirements of paragraph (1) of
this definition; or
(ii) A security that represents an undivided ownership interest in
long-term loans, provided that, at the time of issuance of the security,
all of the loans meet the requirements of paragraph (1) of this
definition.
Insured depository institution means an insured depository
institution as defined in section 2(12) of the Act (12 U.S.C. 1422(12)).
Long-term means a term to maturity of five years or greater.
Manufactured housing means a manufactured home as defined in section
[[Page 104]]
603(6) of the Manufactured Home Construction and Safety Standards Act of
1974, as amended (42 U.S.C. 5402(6)).
Multifamily property means:
(1) Real property that is solely residential and includes five or
more dwelling units;
(2) Real property that includes five or more dwelling units combined
with commercial units, provided that the property is primarily
residential; or
(3) Nursing homes, dormitories, or homes for the elderly.
Nonperforming loans and leases means the sum of the following,
reported on a regulatory financial report:
(1) Loans and leases that have been past due for 90 days (60 days in
the case of credit union applicants) or longer but are still accruing;
(2) Loans and leases on a nonaccrual basis; and
(3) Restructured loans and leases (not already reported as
nonperforming).
Nonresidential real property means real property that is not used
for residential purposes, including business or industrial property,
hotels, motels, churches, hospitals, educational and charitable
institution buildings or facilities, clubs, lodges, association
buildings, golf courses, recreational facilities, farm property not
containing a dwelling unit, or similar types of property.
One-to-four family property means:
(1) Real property that is solely residential, including one-to-four
family dwelling units or more than four family dwelling units if each
dwelling unit is separated from the other dwelling units by dividing
walls that extend from ground to roof, such as row houses, townhouses or
similar types of property;
(2) Manufactured housing if applicable state law defines the
purchase or holding of manufactured housing as the purchase or holding
of real property;
(3) Individual condominium dwelling units or interests in individual
cooperative housing dwelling units that are part of a condominium or
cooperative building without regard to the number of total dwelling
units therein; or
(4) Real property which includes one-to-four family dwelling units
combined with commercial units, provided the property is primarily
residential.
Other real estate owned means all other real estate owned (i.e.,
foreclosed and repossessed real estate), reported on a regulatory
financial report, and does not include direct and indirect investments
in real estate ventures.
Regulatory examination report means a written report of examination
prepared by the applicant's appropriate regulator, containing, in the
case of insured depository institution applicants, a composite rating
assigned to the institution following the guidelines of the Uniform
Financial Institutions Rating System, including a CAMEL rating, a MACRO
rating, or other similar rating.
Regulatory financial report means a financial report that an
applicant is required to file with its appropriate regulator on a
specific periodic basis, including the quarterly call report for
commercial banks, thrift financial report for savings associations,
quarterly or semi-annual call report for credit unions, the National
Association of Insurance Commissioners' annual or quarterly report for
insurance companies, or other similar report, including such report
maintained by the appropriate regulator on a computer on-line database.
Residential mortgage loan means any one of the following types of
loans, whether or not fully amortizing:
(1) Home mortgage loans;
(2) Funded residential construction loans;
(3) Loans secured by manufactured housing whether or not defined by
state law as secured by an interest in real property;
(4) Loans secured by junior liens on one-to-four family property or
multifamily property;
(5) Mortgage pass-through securities representing an undivided
ownership interest in:
(i) Loans that meet the requirements of paragraphs (1) through (4)
of this definition at the time of issuance of the security;
(ii) Securities representing an undivided ownership interest in
loans, provided that, at the time of issuance of the security, all of
the loans meet the requirements of paragraphs (1) through (4) of this
definition; or
(iii) Mortgage debt securities as defined in paragraph (6) of this
definition;
[[Page 105]]
(6) Mortgage debt securities secured by:
(i) Loans, provided that, at the time of issuance of the security,
substantially all of the loans meet the requirements of paragraphs (1)
through (4) of this definition;
(ii) Securities that meet the requirements of paragraph (5) of this
definition; or
(iii) Securities secured by assets, provided that, at the time of
issuance of the security, all of the assets meet the requirements of
paragraphs (1) through (5) of this definition;
(7) Home mortgage loans secured by a leasehold interest, as defined
in paragraph (1)(ii) of the definition of ``home mortgage loan,'' except
that the period of the lease term may be for any duration; or
(8) Loans that finance properties or activities that, if made by a
member, would satisfy the statutory requirements for the CIP established
under section 10(i) of the Act (12 U.S.C. 1430(i)), or the regulatory
requirements established for any CICA program.
Total assets means the total assets reported on a regulatory
financial report.
[67 FR 12846, Mar. 20, 2002]
Subpart B_Membership Application Process
Source: 61 FR 42543 Aug. 16, 1996, unless otherwise noted.
Sec. 925.2 Membership application requirements.
(a) Application. An applicant for membership in a Bank shall submit
to that Bank an application that satisfies the requirements of this
part. The application shall include a written resolution or
certification duly adopted by the applicant's board of directors, or by
an individual with authority to act on behalf of the applicant's board
of directors, of the following:
(1) Applicant review. Applicant has reviewed the requirements of
this part and, as required by this part, has provided to the best of
applicant's knowledge the most recent, accurate and complete information
available; and
(2) Duty to supplement. Applicant will promptly supplement the
application with any relevant information that comes to applicant's
attention prior to the Bank's decision on whether to approve or deny the
application, and if the Bank's decision is appealed pursuant to Sec.
925.5 of this part, prior to resolution of any appeal by the Finance
Board.
(b) Digest. The Bank shall prepare a written digest for each
applicant stating whether or not the applicant meets each of the
requirements in Sec. Sec. 925.6 to 925.18 of this part, the Bank's
findings and the reasons therefor.
(c) File. The Bank shall maintain a membership file for each
applicant for at least three years after the Bank decides whether to
approve or deny membership and the resolution of any appeal to the
Finance Board. The membership file shall contain at a minimum:
(1) Digest. The digest required by paragraph (b) of this section.
(2) Required documents. All documents required by Sec. Sec. 925.6
to 925.18 of this part, including those documents required to establish
or rebut a presumption under this part, shall be described in and
attached to the digest. The Bank may retain in the file only the
relevant portions of the regulatory financial reports required by this
part. If an applicant's appropriate regulator requires return or
destruction of a regulatory examination report, the date that the report
is returned or destroyed shall be noted in the file.
(3) Additional documents. Any additional document submitted by the
applicant, or otherwise obtained or generated by the Bank, concerning
the applicant.
(4) Decision resolution. The decision resolution described in Sec.
925.3(b) of this part.
(The information collection requirements contained in this section have
been approved by the Office of Management and Budget under control
number 3069-0004)
[61 FR 42543, Aug. 16, 1996, as amended at 63 FR 40023, July 27, 1998;
65 FR 8261, Feb. 18, 2000]
Sec. 925.3 Decision on application.
(a) Authority. The Finance Board authorizes the Banks to approve or
deny all applications for membership, subject to the requirements of
this part.
[[Page 106]]
The Bank may delegate the authority to approve membership applications
only to a committee of the Bank's board of directors, the Bank
president, or a senior officer who reports directly to the Bank
president other than an officer with responsibility for business
development.
(b) Decision resolution. For each applicant, the Bank shall prepare
a written resolution duly adopted by the Bank's board of directors, by a
committee of the board of directors, or by an officer with delegated
authority to approve membership applications. The decision resolution
shall state:
(1) That the statements in the digest are accurate to the best of
the Bank's knowledge, and are based on a diligent and comprehensive
review of all available information identified in the digest; and
(2) The Bank's decision and the reasons therefor. Decisions to
approve an application should state specifically that: the applicant is
authorized under the laws of the United States and the laws of the
appropriate state to become a member of, purchase stock in, do business
with, and maintain deposits in, the Bank to which the applicant has
applied; and the applicant meets all of the membership eligibility
criteria of the Act and this part.
(c) Action on applications. The Bank shall act on an application
within 60 calendar days of the date the Bank deems the application to be
complete. An application is ``complete'' when a Bank has obtained all
the information required by this part, and any other information the
Bank deems necessary, to process the application. If an application that
was deemed complete subsequently is deemed incomplete because the Bank
determines during the review process that additional information is
necessary to process the application, the Bank may stop the 60-day clock
until the application again is deemed complete, and then resume the
clock where it left off. The Bank shall notify an applicant in writing
when its application is deemed by the Bank to be complete, and shall
maintain a copy of such letter in the applicant's membership file. The
Bank shall notify an applicant if the 60-day clock is stopped, and when
the clock is resumed, and shall maintain a written record of such
notifications in the applicant's membership file. Within 3 business days
of a Bank's decision on an application, the Bank shall provide the
applicant and the Finance Board's Secretary to the Board with a copy of
the Bank's decision resolution.
(The information collection requirements contained in this section have
been approved by the Office of Management and Budget under control
number 3069-0004)
[61 FR 42543, Aug. 16, 1996, as amended at 63 FR 40023, July 27, 1998;
65 FR 8261, Feb. 18, 2000; 67 FR 12848, Mar. 20, 2002]
Sec. 925.4 Automatic membership.
(a) Automatic membership for certain charter conversions. An insured
depository institution member that converts from one charter type to
another automatically shall become a member of the Bank of which the
converting institution was a member on the effective date of such
conversion, provided that the converting institution continues to be an
insured depository institution and the assets of the institution
immediately before and immediately after the conversion are not
materially different. In such case, all relationships existing between
the member and the Bank at the time of such conversion may continue.
(b) Automatic membership for transfers. Any member whose membership
is transferred pursuant to Sec. 925.18(d) of this part automatically
shall become a member of the Bank to which it transfers.
(c) Automatic membership, in the Bank's discretion, for certain
consolidations. (1) If a member institution (or institutions) and a
nonmember institution are consolidated and the consolidated institution
has its principal place of business in a state in the same Bank district
as the disappearing institution (or institutions), and the consolidated
institution will operate under the charter of the nonmember institution,
on the effective date of the consolidation, the consolidated institution
may, in the discretion of the Bank of which the disappearing institution
(or institutions) was a member immediately prior to the effective date
of the consolidation, automatically become a member of such Bank upon
the
[[Page 107]]
purchase of stock in that Bank pursuant to Sec. 925.20, provided that:
(i) 90 percent or more of the total assets of the consolidated
institution are derived from the total assets of the disappearing member
institution (or institutions); and
(ii) The consolidated institution provides written notice to such
Bank, within 60 calendar days after the effective date of the
consolidation, that it desires to be a member of the Bank.
(2) The provisions of Sec. 925.25(b)(4)(i) shall apply, and upon
approval of automatic membership by the Bank, the provisions of
Sec. Sec. 925.24(c) and (d) shall apply.
[61 FR 42543, Aug. 16, 1996, as amended at 63 FR 40024, July 27, 1998;
65 FR 8261, Feb. 18, 2000; 65 FR 13870, Mar. 15, 2000; 67 FR 12848, Mar.
20, 2002]
Sec. 925.5 Appeals.
(a) Appeals by applicants--(1) Filing procedure. Within 90 calendar
days of the date of a Bank's decision to deny an application for
membership, the applicant may file a written appeal of the decision with
the Finance Board.
(2) Documents. The applicant's appeal shall be addressed to the
Secretary to the Board, Federal Housing Finance Board, 1777 F Street,
NW., Washington, DC 20006, with a copy to the Bank, and shall include
the following documents:
(i) Bank's decision resolution. A copy of the Bank's decision
resolution; and
(ii) Basis for appeal. A statement of the basis for the appeal by
the applicant with sufficient facts, information, analysis and
explanation to rebut any applicable presumptions and otherwise support
the applicant's position.
(b) Record for appeal--(1) Copy of membership file. Upon receiving a
copy of an appeal, the Bank whose action has been appealed (appellee
Bank) shall provide the Finance Board with a copy of the applicant's
complete membership file. Until the Finance Board resolves the appeal,
the appellee Bank shall supplement the materials provided to the Finance
Board as any new materials are received.
(2) Additional information. The Finance Board may request additional
information or further supporting arguments from the appellant, the
appellee Bank or any other party that the Finance Board deems
appropriate.
(c) Deciding appeals. The Finance Board shall consider the record
for appeal described in paragraph (b) of this section and shall resolve
the appeal based on the requirements of the Act and this part within 90
calendar days of the date the appeal is filed with the Finance Board. In
deciding the appeal, the Finance Board shall apply the presumptions in
this part, unless the appellant or appellee Bank presents evidence to
rebut a presumption as provided in Sec. 925.17 of this part.
(The information collection requirements contained in this section have
been approved by the Office of Management and Budget under control
number 3069-0004)
[61 FR 42543, Aug. 16, 1996, as amended at 65 FR 8261, Feb. 18, 2000; 67
FR 12848, Mar. 20, 2002]
Subpart C_Eligibility Requirements
Source: 61 FR 42545, Aug. 16, 1996, unless otherwise noted.
Sec. 925.6 General eligibility requirements.
(a) Requirements. Any building and loan association, savings and
loan association, cooperative bank, homestead association, insurance
company, savings bank, or insured depository institution, upon
application satisfying all of the requirements of the Act and this part,
shall be eligible to become a member of a Bank if:
(1) It is duly organized under the laws of any State or of the
United States;
(2) It is subject to inspection and regulation under the banking
laws, or under similar laws, of any State or of the United States;
(3) It makes long-term home mortgage loans;
(4) Its financial condition is such that advances may be safely made
to it;
(5) The character of its management is consistent with sound and
economical home financing; and
(6) Its home financing policy is consistent with sound and
economical home financing.
(b) Additional eligibility requirement for insured depository
institutions other than
[[Page 108]]
community financial institutions. In order to be eligible to become a
member of a Bank, an insured depository institution applicant other than
a community financial institution also must have at least 10 percent of
its total assets in residential mortgage loans.
(c) Additional eligibility requirement for applicants that are not
insured depository institutions. In order to be eligible to become a
member of a Bank, an applicant that is not an insured depository
institution also must have mortgage-related assets that reflect a
commitment to housing finance, as determined by the Bank in its
discretion.
(d) Ineligibility. Except as otherwise provided in this part, if an
applicant does not satisfy the requirements of this part, the applicant
is ineligible for membership.
(The information collection requirements contained in this section have
been approved by the Office of Management and Budget under control
number 3069-0004)
[61 FR 42545, Aug. 16, 1996, as amended at 65 FR 13870, Mar. 15, 2000]
Sec. 925.7 Duly organized requirement.
An applicant shall be deemed to be duly organized as required by
section 4(a)(1)(A) of the Act (12 U.S.C. 1424(a)(1)(A)) and Sec.
925.6(a)(1) of this part, if it is chartered by a state or federal
agency as a building and loan association, savings and loan association,
cooperative bank, homestead association, insurance company, savings bank
or insured depository institution.
(The information collection requirements contained in this section have
been approved by the Office of Management and Budget under control
number 3069-0004)
[61 FR 42545, Aug. 16, 1996, as amended at 65 FR 8261, Feb. 18, 2000; 67
FR 12848, Mar. 20, 2002]
Sec. 925.8 Subject to inspection and regulation requirement.
An applicant shall be deemed to be subject to inspection and
regulation as required by section 4(a)(1)(B) of the Act (12 U.S.C.
1424(a)(1)(B)) and Sec. 925.6(a)(2) of this part, if, in the case of a
depository institution applicant, it is subject to inspection and
regulation by the FDIC, FRB, NCUA, OCC, OTS, or other appropriate state
regulator, and, in the case of an insurance company applicant, it is
subject to inspection and regulation by an appropriate state regulator
accredited by the National Association of Insurance Commissioners.
(The information collection requirements contained in this section have
been approved by the Office of Management and Budget under control
number 3069-0004)
[61 FR 42545, Aug. 16, 1996, as amended at 65 FR 8261, Feb. 18, 2000; 67
FR 12848, Mar. 20, 2002]
Sec. 925.9 Makes long-term home mortgage loans requirement.
An applicant shall be deemed to make long-term home mortgage loans
as required by section 4(a)(1)(C) of the Act (12 U.S.C. 1424(a)(1)(C))
and Sec. 925.6(a)(3) of this part, if, based on the applicant's most
recent regulatory financial report filed with its appropriate regulator,
the applicant originates or purchases long-term home mortgage loans.
(The information collection requirements contained in this section have
been approved by the Office of Management and Budget under control
number 3069-0004)
[61 FR 42545, Aug. 16, 1996, as amended at 63 FR 40023, July 27, 1998;
65 FR 8261, Feb. 18, 2000; 67 FR 12848, Mar. 20, 2002]
Sec. 925.10 10 percent requirement for certain insured depository
institution applicants.
An insured depository institution applicant that is subject to the
10 percent requirement of section 4(a)(2)(A) of the Act (12 U.S.C.
1424(a)(2)(A))and section 925.6(b) of this part, shall be deemed to be
in compliance with such requirement if, based on the applicant's most
recent regulatory financial report filed with its appropriate regulator,
the applicant has at least 10 percent of its total assets in residential
mortgage loans, except that any assets used to secure mortgage debt
securities as described in paragraph (6) of the definition of
``residential mortgage loan'' set forth in Sec. 925.1 of this part
shall not be used to meet this requirement.
[65 FR 13870, Mar. 15, 2000, as amended at 67 FR 12848, Mar. 20, 2002]
[[Page 109]]
Sec. 925.11 Financial condition requirement for applicants other than
insurance companies.
(a) Review requirement. In determining whether an applicant other
than an insurance company has complied with the financial condition
requirement of section 4(a)(2)(B) of the Act (12 U.S.C. 1424(a)(2)(B))
and Sec. 925.6(a)(4) of this part, the Bank shall obtain as a part of
the membership application and review each of the following documents:
(1) Regulatory financial reports. The regulatory financial reports
filed by the applicant with its appropriate regulator for the last six
calendar quarters and three year-ends preceding the date the Bank
receives the application;
(2) Financial statement. In order of preference: the most recent
independent audit of the applicant conducted in accordance with
generally accepted auditing standards by a certified public accounting
firm which submits a report on the applicant; the most recent
independent audit of the applicant's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated
holding company but not on the applicant separately; the most recent
Directors' examination of the applicant conducted in accordance with
generally accepted auditing standards by a certified public accounting
firm; the most recent Directors' examination of the applicant performed
by other external auditors; the most recent review of the applicant's
financial statements by external auditors; the most recent Compilation
of the applicant's financial statements by external auditors; or the
most recent audit of other procedures of the applicant;
(3) Regulatory examination report. The applicant's most recent
available regulatory examination report prepared by its appropriate
regulator, a summary prepared by the Bank of the applicant's strengths
and weaknesses as cited in the regulatory examination report, and a
summary prepared by the Bank or applicant of actions taken by the
applicant to respond to examination weaknesses;
(4) Enforcement actions. A description prepared by the Bank or
applicant of any outstanding enforcement actions against the applicant,
responses by the applicant, reports as required by the enforcement
action, and verbal or written indications, if available, from the
appropriate regulator of how the applicant is complying with the terms
of the enforcement action; and
(5) Additional information. Any other relevant document or
information concerning the applicant that comes to the Bank's attention
in reviewing the applicant's financial condition.
(b) Standards. An applicant other than an insurance company shall be
deemed to be in compliance with the financial condition requirement of
section 4(a)(2)(B) of the Act (12 U.S.C. 1424(a)(2)(B)) and Sec.
925.6(a)(4) of this part, if:
(1) Recent composite regulatory examination rating. The applicant
has received a composite regulatory examination rating from its
appropriate regulator within two years preceding the date the Bank
receives the application;
(2) Capital requirement. The applicant meets all of its minimum
statutory and regulatory capital requirements as reported in its most
recent quarter-end regulatory financial report filed with its
appropriate regulator; and
(3) Minimum performance standard. (i) The applicant's most recent
composite regulatory examination rating from its appropriate regulator
within the past two years was ``1;'' or was ``2'' or ``3'' and, based on
the applicant's most recent regulatory financial report filed with its
appropriate regulator, the applicant satisfied all of the following
performance trend criteria:
(A) Earnings. The applicant's adjusted net income was positive in
four of the six most recent calendar quarters;
(B) Nonperforming assets. The applicant's nonperforming loans and
leases plus other real estate owned, did not exceed 10 percent of its
total loans and leases plus other real estate owned, in the most recent
calendar quarter; and
(C) Allowance for loan and lease losses. The applicant's ratio of
its allowance for loan and lease losses plus the allocated transfer risk
reserve to nonperforming loans and leases was 60 percent
[[Page 110]]
or greater during 4 of the 6 most recent calendar quarters.
(ii) For applicants that are not required to report financial data
to their appropriate regulator on a quarterly basis, the information
required in paragraph (b)(3)(i) of this section may be reported on a
semiannual basis.
(c) Eligible collateral not considered. The availability of
sufficient eligible collateral to secure advances to the applicant is
presumed and shall not be considered in determining whether an applicant
is in the financial condition required by section 4(a)(2)(B) of the Act
(12 U.S.C. 1424(a)(2)(B)) and Sec. 925.6(a)(4) of this part.
(The information collection requirements contained in this section have
been approved by the Office of Management and Budget under control
number 3069-0004)
[61 FR 42545, Aug. 16, 1996, as amended at 63 FR 40023, 40024, July 27,
1998; 65 FR 8261, Feb. 18, 2000; 67 FR 12848, Mar. 20, 2002]
Sec. 925.12 Character of management requirement.
An applicant shall be deemed to be in compliance with the character
of management requirement of section 4(a)(2)(C) of the Act (12 U.S.C.
1424(a)(2)(C)) and Sec. 925.6(a)(5) of this part, if the applicant
provides to the Bank an unqualified written certification duly adopted
by the applicant's board of directors, or by an individual with
authority to act on behalf of the applicant's board of directors, that:
(a) Enforcement actions. Neither the applicant nor any of its
directors or senior officers is subject to, or operating under, any
enforcement action instituted by its appropriate regulator;
(b) Criminal, civil or administrative proceedings. Neither the
applicant nor any of its directors or senior officers has been the
subject of any criminal, civil or administrative proceedings reflecting
upon creditworthiness, business judgment, or moral turpitude since the
most recent regulatory examination report; and
(c) Criminal, civil or administrative monetary liabilities, lawsuits
or judgments. There are no known potential criminal, civil or
administrative monetary liabilities, material pending lawsuits, or
unsatisfied judgments against the applicant or any of its directors or
senior officers since the most recent regulatory examination report,
that are significant to the applicant's operations.
(The information collection requirements contained in this section have
been approved by the Office of Management and Budget under control
number 3069-0004)
[61 FR 42545, Aug. 16, 1996, as amended at 63 FR 40023, July 27, 1998;
65 FR 8261, Feb. 18, 2000; 67 FR 12848, Mar. 20, 2002]
Sec. 925.13 Home financing policy requirement.
(a) Standard. An applicant shall be deemed to be in compliance with
the home financing policy requirement of section 4(a)(2)(C) of the Act
(12 U.S.C. 1424(a)(2)(C)) and Sec. 925.6(a)(6) of this part, if the
applicant has received a Community Reinvestment Act (CRA) rating of
``Satisfactory'' or better on its most recent formal, or if unavailable,
informal or preliminary, CRA performance evaluation.
(b) Written justification required. An applicant that is not subject
to the CRA shall file as part of its application for membership a
written justification acceptable to the Bank of how and why the
applicant's home financing policy is consistent with the Bank System's
housing finance mission.
(The information collection requirements contained in this section have
been approved by the Office of Management and Budget under control
number 3069-0004)
[61 FR 42545, Aug. 16, 1996, as amended at 65 FR 8261, Feb. 18, 2000; 67
FR 12848, Mar. 20, 2002]
Sec. 925.14 De novo insured depository institution applicants.
(a) Duly organized, subject to inspection and regulation, financial
condition and character of management requirements. An insured
depository institution applicant whose date of charter approval is
within three years prior to the date the Bank receives the applicant's
application for membership in the Bank (de novo applicant) is deemed to
meet the requirements of Sec. Sec. 925.7, 925.8, 925.11 and 925.12.
(b) Makes long-term home mortgage loans requirement. A de novo
applicant shall be deemed to make long-term home mortgage loans as
required by
[[Page 111]]
Sec. 925.9 if it has filed as part of its application for membership a
written justification acceptable to the Bank of how its home financing
credit policy and lending practices will include originating or
purchasing long-term home mortgage loans.
(c) 10 percent requirement. (1) One-year requirement. A de novo
applicant that is subject to the 10 percent requirement of section
4(a)(2)(A) of the Act (12 U.S.C. 1424(a)(2)(A)) and Sec. 925.6(b) shall
have until one year after commencing its initial business operations to
meet the 10 percent requirement of Sec. 925.10.
(2) Conditional approval. A de novo applicant shall be conditionally
deemed to be in compliance with the 10 percent requirement of section
4(a)(2)(A) of the Act (12 U.S.C. 1424(a)(2)(A)) and Sec. 925.6(b). A de
novo applicant that receives such conditional membership approval is
subject to the stock purchase requirements of Sec. 925.20 and the
advances provisions of part 950 of this chapter.
(3) Approval. A de novo applicant shall be deemed to be in
compliance with the 10 percent requirement of section 4(a)(2)(A) of the
Bank Act (12 U.S.C. 1424(a)(2)(A)) and Sec. 925.6(b) upon receipt by
the Bank from the applicant, within one year after commencement of the
applicant's initial business operations, of evidence acceptable to the
Bank that the applicant satisfies the 10 percent requirement.
(4) Conditional approval deemed null and void. If the requirements
of paragraph (c)(3) of this section are not satisfied, a de novo
applicant shall be deemed to be in noncompliance with the 10 percent
requirement of section 4(a)(2)(A) of the Act (12 U.S.C. 1424(a)(2)(A))
and Sec. 925.6(b), and its conditional membership approval is deemed
null and void.
(5) Treatment of outstanding advances and Bank stock. If a de novo
applicant's conditional membership approval is deemed null and void
pursuant to paragraph (c)(4) of this section, the liquidation of any
outstanding indebtedness owed by the applicant to the Bank and
redemption of stock of such Bank shall be carried out in accordance with
Sec. 925.29.
(d) Home financing policy requirement. (1) Conditional approval. A
de novo applicant that has not received its first formal, or, if
unavailable, informal or preliminary, Community Reinvestment Act (CRA)
performance evaluation, shall be conditionally deemed to be in
compliance with the home financing policy requirement of section
4(a)(2)(C) of the Act (12 U.S.C. 1424(a)(2)(C)) and Sec. 925.6(a)(6),
if the applicant has filed as part of its application for membership a
written justification acceptable to the Bank of how and why its home
financing credit policy and lending practices will meet the credit needs
of its community. An applicant that receives such conditional membership
approval is subject to the stock purchase requirements of Sec. 925.20
and the advances provisions of part 950 of this chapter.
(2) Approval. A de novo applicant that has been granted conditional
approval under paragraph (d)(1) of this section shall be deemed to be in
compliance with the home financing policy requirement of section
4(a)(2)(C) of the Act (12 U.S.C. 1424(a)(2)(C)) and Sec. 925.6(a)(6)
upon receipt by the Bank of evidence from the applicant that it received
a CRA rating of ``Satisfactory'' or better on its first formal, or if
unavailable, informal or preliminary, CRA performance evaluation.
(3) Conditional approval deemed null and void. If the de novo
applicant's first such CRA rating is ``Needs to Improve'' or
``Substantial Non-Compliance,'' the applicant shall be deemed to be in
noncompliance with the home financing policy requirement of section
4(a)(2)(C) of the Act (12 U.S.C. 1424(a)(2)(C)) and Sec. 925.6(a)(6),
subject to rebuttal by the applicant under Sec. 925.17(f), and its
conditional membership approval is deemed null and void.
(4) Treatment of outstanding advances and Bank stock. If the
applicant's conditional membership approval is deemed null and void
pursuant to paragraph (d)(3) of this section, the liquidation of any
outstanding indebtedness owed by the applicant to the Bank and
redemption of stock of such Bank shall be carried out in accordance with
Sec. 925.29.
[67 FR 12848, Mar. 20, 2002]
[[Page 112]]
Sec. 925.15 Recent merger or acquisition applicants.
An applicant that merged with or acquired another institution prior
to the date the Bank receives its application for membership is subject
to the requirements of Sec. Sec. 925.7 to 925.13 of this part except as
provided in this section.
(a) Financial condition requirement--(1) Regulatory financial
reports. For purposes of Sec. 925.11(a)(1) of this part, an applicant
that, as a result of a merger or acquisition preceding the date the Bank
receives its application for membership, has not yet filed regulatory
financial reports with its appropriate regulator for the last six
calendar quarters and three year-ends preceding such date, shall provide
any regulatory financial reports that the applicant has filed with its
appropriate regulator.
(2) Performance trend criteria. For purposes of Sec.
925.11(b)(3)(i) (A) to (C) of this part, an applicant that, as a result
of a merger or acquisition preceding the date the Bank receives its
application for membership, has not yet filed combined regulatory
financial reports with its appropriate regulator for the last six
calendar quarters preceding such date, shall provide pro forma combined
financial statements for those calendar quarters in which actual
combined regulatory financial reports are unavailable.
(b) Home financing policy requirement. For purposes of Sec. 925.13
of this part, an applicant that, as a result of a merger or acquisition
preceding the date the Bank receives its application for membership, has
not received its first formal, or if unavailable, informal or
preliminary, Community Reinvestment Act performance evaluation, shall
file as part of its application a written justification acceptable to
the Bank of how and why the applicant's home financing credit policy and
lending practices will meet the credit needs of its community.
(c) Makes long-term home mortgage loans requirement; 10 percent
requirement. For purposes of determining compliance with Sec. Sec.
925.9 and 925.10, a Bank may, in its discretion, permit an applicant
that, as a result of a merger or acquisition preceding the date the Bank
receives its application for membership, has not yet filed a
consolidated regulatory financial report as a combined entity with its
appropriate regulator, to provide the combined pro forma financial
statement for the combined entity filed with the regulator that approved
the merger or acquisition.
(The information collection requirements contained in this section have
been approved by the Office of Management and Budget under control
number 3069-0004)
[61 FR 42545, Aug. 16, 1996, as amended at 63 FR 40023, 40024, July 27,
1998; 65 FR 8261, Feb. 18, 2000]
Sec. 925.16 Financial condition requirement for insurance company
applicants.
An insurance company applicant shall be deemed to meet the financial
condition requirement of section 4(a)(2)(B) of the Act (12 U.S.C.
1424(a)(2)(B)) and Sec. 925.6(a)(4) of this part, if, based on the
information contained in the applicant's most recent regulatory
financial report filed with its appropriate regulator, the applicant
meets all of its minimum statutory and regulatory capital requirements
and the capital standards established by the National Association of
Insurance Commissioners.
(The information collection requirements contained in this section have
been approved by the Office of Management and Budget under control
number 3069-0004)
[61 FR 42545, Aug. 16, 1996, as amended at 63 FR 40023, July 27, 1998;
65 FR 8261, Feb. 18, 2000; 67 FR 12849, Mar. 20, 2002]
Sec. 925.17 Rebuttable presumptions.
(a) Rebutting presumptive compliance. The presumption that an
applicant meeting the requirements of Sec. Sec. 925.7 to 925.16 of this
part is in compliance with section 4(a) of the Act (12 U.S.C. 1424(a))
and Sec. 925.6 (a) and (b) of this part, may be rebutted, and the Bank
may deny membership to the applicant, if the Bank obtains substantial
evidence to overcome the presumption of compliance.
(b) Rebutting presumptive noncompliance. The presumption that an
applicant not meeting a particular requirement of Sec. Sec. 925.8,
925.11, 925.12, 925.13, or 925.16 of this part is in noncompliance with
section 4(a) of the Act (12 U.S.C. 1424(a)) and Sec. 925.6(a)(2), (4),
(5), or (6) of
[[Page 113]]
this part, may be rebutted, and the applicant shall be deemed to meet
such requirement, if the applicable requirements in this section are
satisfied.
(c) Presumptive noncompliance by insurance company applicant with
``subject to inspection and regulation'' requirement of Sec. 925.8. If
an insurance company applicant is not subject to inspection and
regulation by an appropriate state regulator accredited by the National
Association of Insurance Commissioners (NAIC), as required by Sec.
925.8 of this part, the applicant or the Bank shall prepare a written
justification that provides substantial evidence acceptable to the Bank
that the applicant is subject to inspection and regulation as required
by Sec. 925.6(a)(2) of this part, notwithstanding the lack of NAIC
accreditation.
(d) Presumptive noncompliance with financial condition requirements
of Sec. Sec. 925.11 and 925.16--(1) Applicants other than insurance
companies. For applicants other than insurance companies, in the case of
an applicant's lack of a composite regulatory examination rating within
the two-year period required by Sec. 925.11(b)(1) of this part, a
variance from the rating required by Sec. 925.11(b)(3)(i) of this part,
or a variance from a performance trend criterion required by Sec.
925.11(b)(3)(i) of this part, the applicant or the Bank shall prepare a
written justification pertaining to such requirement that provides
substantial evidence acceptable to the Bank that the applicant is in the
financial condition required by Sec. 925.6(a)(4) of this part,
notwithstanding the lack of rating or variance.
(2) Insurance company applicants. In the case of an insurance
company applicant's variance from a capital requirement or standard of
Sec. 925.16 of this part, the applicant or the Bank shall prepare a
written justification pertaining to such requirement or standard that
provides substantial evidence acceptable to the Bank that the applicant
is in the financial condition required by Sec. 925.6(a)(4) of this
part, notwithstanding the variance.
(e) Presumptive noncompliance with character of management
requirement of Sec. 925.12--(1) Enforcement actions. If an applicant or
any of its directors or senior officers is subject to, or operating
under, any enforcement action instituted by its appropriate regulator,
the applicant shall provide or the Bank shall obtain:
(i) Regulator confirmation. Written or verbal confirmation from the
applicant's appropriate regulator that the applicant or its directors or
senior officers are in substantial compliance with all aspects of the
enforcement action; or
(ii) Written analysis. A written analysis acceptable to the Bank
indicating that the applicant or its directors or senior officers are in
substantial compliance with all aspects of the enforcement action. The
written analysis shall state each action the applicant or its directors
or senior officers are required to take by the enforcement action, the
actions actually taken by the applicant or its directors or senior
officers, and whether the applicant regards this as substantial
compliance with all aspects of the enforcement action.
(2) Criminal, civil or administrative proceedings. If an applicant
or any of its directors or senior officers has been the subject of any
criminal, civil or administrative proceedings reflecting upon
creditworthiness, business judgment, or moral turpitude since the most
recent regulatory examination report, the applicant shall provide or the
Bank shall obtain:
(i) Regulator confirmation. Written or verbal confirmation from the
applicant's appropriate regulator that the proceedings will not likely
result in enforcement action; or
(ii) Written analysis. A written analysis acceptable to the Bank
indicating that the proceedings will not likely result in enforcement
action. The written analysis shall state the severity of the charges,
and any mitigating action taken by the applicant or its directors or
senior officers.
(3) Criminal, civil or administrative monetary liabilities, lawsuits
or judgments. If there are any known potential criminal, civil or
administrative monetary liabilities, material pending lawsuits, or
unsatisfied judgments against the applicant or any of its directors or
senior officers since the most recent regulatory examination report,
that
[[Page 114]]
are significant to the applicant's operations, the applicant shall
provide or the Bank shall obtain:
(i) Regulator confirmation. Written or verbal confirmation from the
applicant's appropriate regulator that the liabilities, lawsuits or
judgments will not likely cause the applicant to fall below its
applicable capital requirements set forth in Sec. Sec. 925.11(b)(2) and
925.16 of this part; or
(ii) Written analysis. A written analysis acceptable to the Bank
indicating that the liabilities, lawsuits or judgments will not likely
cause the applicant to fall below its applicable capital requirements
set forth in Sec. Sec. 925.11(b)(2) and 925.16 of this part. The
written analysis shall state the likelihood of the applicant or its
directors or senior officers prevailing, and the financial consequences
if the applicant or its directors or senior officers do not prevail.
(f) Presumptive noncompliance with home financing policy
requirements of Sec. Sec. 925.13 and 925.14(d). If an applicant
received a ``Substantial Non-Compliance'' rating on its most recent
formal, or if unavailable, informal or preliminary, Community
Reinvestment Act (CRA) performance evaluation, or a ``Needs to Improve''
CRA rating on its most recent formal, or if unavailable, informal or
preliminary, CRA performance evaluation and a CRA rating of ``Needs to
Improve'' or better on any immediately preceding CRA performance
evaluation, the applicant shall provide or the Bank shall obtain:
(1) Regulator confirmation. Written or verbal confirmation from the
applicant's appropriate regulator of the applicant's recent satisfactory
CRA performance, including any corrective action that substantially
improved upon the deficiencies cited in the most recent CRA performance
evaluation(s); or
(2) Written analysis. A written analysis acceptable to the Bank
demonstrating that the CRA rating is unrelated to home financing, and
providing substantial evidence of how and why the applicant's home
financing credit policy and lending practices meet the credit needs of
its community.
(The information collection requirements contained in this section have
been approved by the Office of Management and Budget under control
number 3069-0004)
[61 FR 42545, Aug. 16, 1996, as amended at 63 FR 40023, July 27, 1998;
65 FR 8261, Feb. 18, 2000; 67 FR 12849, Mar. 20, 2002]
Sec. 925.18 Determination of appropriate Bank district for membership.
(a) Eligibility. (1) An institution eligible to become a member of a
Bank under the Act and this part may become a member only of the Bank of
the district in which the institution's principal place of business is
located, except as provided in paragraph (a)(2) of this section. A
member shall promptly notify its Bank in writing whenever it relocates
its principal place of business to another state and the Bank shall
inform the Finance Board in writing of any such relocation.
(2) An institution eligible to become a member of a Bank under the
Act and this part may become a member of the Bank of a district
adjoining the district in which the institution's principal place of
business is located, if demanded by convenience and then only with the
approval of the Finance Board.
(b) Principal place of business. Except as otherwise designated in
accordance with this section, the principal place of business of an
institution is the state in which the institution maintains its home
office established as such in conformity with the laws under which the
institution is organized.
(c) Designation of principal place of business. (1) A member or an
applicant for membership may request in writing to the Bank in the
district where the institution maintains its home office that a state
other than the state in which it maintains its home office be designated
as its principal place of business. Within 90 calendar days of receipt
of such written request, the board of directors of the Bank in the
district where the institution maintains its home office shall designate
a state other than the state where the institution maintains its home
office as the
[[Page 115]]
institution's principal place of business, provided all of the following
criteria are satisfied:
(i) At least 80 percent of the institution's accounting books,
records and ledgers are maintained, located or held in such designated
state;
(ii) A majority of meetings of the institution's board of directors
and constituent committees are conducted in such designated state; and
(iii) A majority of the institution's five highest paid officers
have their place of employment located in such designated state.
(2) Written notice of a designation made pursuant to paragraph
(c)(1) of this section shall be sent to the Bank in the district
containing the designated state, the Finance Board and the institution.
(3) The notice of designation made pursuant to paragraph (c)(1) of
this section shall include the state designated as the principal place
of business and the resulting Bank to which membership will be
transferred.
(4) If the board of directors of the Bank in the district where the
institution maintains its home office fails to make the designation
requested by the member or applicant pursuant to paragraph (c)(1) of
this section, then the member or applicant may request in writing that
the Finance Board make the designation.
(d) Transfer of membership. (1) No transfer of membership from one
Bank to another Bank shall take effect until the Banks involved reach
agreement on a method of orderly transfer.
(2) In the event that the Banks involved fail to agree on a method
of orderly transfer, the Finance Board shall determine the conditions
under which the transfer shall take place.
(e) Effect of transfer. A transfer of membership pursuant to this
section shall be effective for all purposes, but shall not affect voting
rights in the year of the transfer and shall not be subject to the
provisions on termination of membership set forth in section 6 of the
Act (12 U.S.C. 1426) or Sec. Sec. 925.26 and 925.27, nor the
restriction on reacquiring Bank membership set forth in Sec. 925.30.
(The information collection requirements contained in this section have
been approved by the Office of Management and Budget under control
number 3069-0004)
[61 FR 42545, Aug. 16, 1996, as amended at 63 FR 65692, Nov. 30, 1998;
65 FR 8261, Feb. 18, 2000; 65 FR 13870, Mar. 15, 2000; 67 FR 12849, Mar.
20, 2002]
Subpart D_Stock Requirements
Source: 58 FR 43542, Aug. 17, 1993, unless otherwise noted.
Redesignated at 61 FR 42542, Aug. 16, 1996.
Sec. 925.19 Par value and price of stock.
The capital stock of each Bank shall be sold at par, unless the
Board has fixed a higher price.
Sec. 925.20 Stock purchase.
(a) Minimum stock purchase. Each member shall purchase stock in the
Bank in which it is a member in an amount equal to the greater of:
(1) $500;
(2) 1 percent of the member's aggregate unpaid loan principal; or
(3) 5 percent of the member's aggregate amount of outstanding
advances.
(b) Timing of minimum stock purchase. (1) Within 60 calendar days
after an institution is approved for membership in a Bank pursuant to
Sec. 925.3 of this part, or an institution is automatically approved
for membership pursuant to Sec. 925.4(c) of this part, the institution
shall purchase its minimum stock requirement as set forth in paragraph
(a) of this section.
(2) At the election of an institution approved for membership,
including those automatically approved under Sec. 925.4(c) of this
part, the institution may purchase its minimum stock requirement in
installments, provided that not less than one-fourth of the total amount
shall be purchased within 60 calendar days of the date of approval of
membership, and that a further sum of not less than one-fourth of such
total shall be purchased at the end of each succeeding period of four
months from the date of approval of membership.
(c) Commencement of membership. An institution that has been
approved for
[[Page 116]]
membership shall become a member at the time it purchases its minimum
stock requirement or the first installment thereof pursuant to this
section.
(d) Failure to purchase minimum stock requirement. If an institution
that has submitted an application and been approved for membership fails
to purchase its minimum stock requirement or its first installment
within 60 calendar days of the date of its approval for membership, such
approval shall be null and void and the institution, if it wants to be a
member, shall be required to submit a new application for membership.
(e) Reports. The Bank shall make quarterly reports to the Finance
Board setting forth purchases by institutions approved for membership of
their minimum stock requirement pursuant to this section.
[58 FR 43542, Aug. 17, 1993; 58 FR 47181, Sept. 7, 1993. Redesignated
and amended at 61 FR 42542, 42549, Aug. 16, 1996; 63 FR 40024, July 27,
1998; 63 FR 65692, Nov. 30, 1998; 65 FR 8261, Feb. 18, 2000; 65 FR
13870, Mar. 15, 2000]
Sec. 925.21 Issuance and form of stock.
(a) A Bank shall issue to each new member, as of the effective date
of membership, stock in the member's name for the amount of stock
purchased and paid for in full.
(b) If the member purchases stock in installments, the stock shall
be issued in installments with the appropriate number of shares issued
after each payment is made.
(c) Stock may be issued in certificated or uncertificated form at
the discretion of the Bank.
(d) A Bank may convert all outstanding certificated stock to
uncertificated form at its discretion.
Sec. 925.22 Adjustments in stock holdings.
(a) Adjustment in general. A Bank may from time to time increase or
decrease the amount of stock any member is required to hold.
(b)(1) Annual adjustment. A Bank shall calculate annually, in the
manner set forth in Sec. 925.20(a) of this part, each member's required
minimum holdings of stock in the Bank in which it is a member using
calendar year-end financial data provided by the member to the Bank,
pursuant to Sec. 925.31(d) of this part, and shall notify each member
of the adjustment. The notice shall clearly state that the Bank's
calculation of each member's minimum stock holdings is to be used to
determine the number of votes that the member may cast in that year's
election of directors and shall identify the state within the district
in which the member will vote. A member that does not agree with the
Bank's calculation of the minimum stock requirement or with the
identification of its voting state may request the Finance Board to
review the Bank's determination. The Finance Board shall promptly
determine the member's minimum required holdings and its proper voting
state, which determination shall be final.
(2) Redemption of excess shares. If, after the annual adjustment
required by paragraph (b)(1) of this section is made, the amount of
stock that a member is required to hold is decreased, the Bank may, in
its discretion and upon proper application of the member, retire such
excess stock, and the Bank shall pay for each share upon surrender of
the stock an amount equal to the par value thereof (except that if at
any time the Finance Board finds that the paid-in capital of a Bank is
or is likely to be impaired as a result of losses in or depreciation of
the assets held, the Bank shall on the order of the Finance Board
withhold from the amount to be paid in retirement of the stock a pro
rata share of the amount of such impairment as determined by the Finance
Board) or, at its election, the Bank may credit any part of such payment
against the member's debt to the Bank.
(c) A member's stock holdings shall not be reduced under this
section to an amount less than required by sections 6(b), 10(c) and
10(e) of the Act (12 U.S.C. 1426(b), 1430(c), 1430(e)).
(The information collection requirements contained in this section have
been approved where applicable by the Office of Management and Budget
under control number 3069-0004)
[58 FR 43542, Aug. 17, 1993, as amended at 58 FR 50837, Sept. 29, 1993;
58 FR 53023, Oct. 13, 1993; 58 FR 58231, Oct. 29, 1993. Redesignated and
amended at 61 FR 42542, 42549, Aug. 16, 1996; 63 FR 65692, Nov. 30,
1998; 65 FR 8261, Feb. 18, 2000; 67 FR 12849, Mar. 20, 2002]
[[Page 117]]
Sec. 925.23 Purchase of excess stock.
A member may purchase stock in excess of the minimum amount required
by Sec. 925.20(a) of this part as long as such purchase is approved by
the member's Bank and the laws under which the member operates permit
such purchase.
[58 FR 43542, Aug. 17, 1993. Redesignated and amended at 61 FR 42542,
42549, Aug. 16, 1996; 65 FR 8262, Feb. 18, 2000]
Subpart E_Consolidations Involving Members
Source: 58 FR 43542, Aug. 17, 1993, unless otherwise noted.
Redesignated at 61 FR 42542, Aug. 16, 1996.
Sec. 925.24 Consolidations involving members.
(a) Consolidation of members. Upon the consolidation of two or more
institutions that are members of the same Bank into one institution
operating under the charter of one of the consolidating institutions,
the membership of the surviving institution shall continue and the
membership of each disappearing institution shall terminate on the
cancellation of its charter. Upon the consolidation of two or more
institutions, at least two of which are members of different Banks, into
one institution operating under the charter of one of the consolidating
institutions, the membership of the surviving institution shall continue
and the membership of each disappearing institution shall terminate upon
cancellation of its charter, provided, however, that if more than 80
percent of the assets of the consolidated institution are derived from
the assets of a disappearing institution, then the consolidated
institution shall continue to be a member of the Bank of which that
disappearing institution was a member prior to the consolidation, and
the membership of the other institutions shall terminate upon the
effective date of the consolidation.
(b) Consolidation into nonmember--(1) In general. Upon the
consolidation of a member into an institution that is not a member of a
Bank, where the consolidated institution operates under the charter of
the nonmember institution, the membership of the disappearing
institution shall terminate upon the cancellation of its charter.
(2) Notification. If a member has consolidated into a nonmember that
has its principal place of business in a state in the same Bank district
as the former member, the consolidated institution shall have 60
calendar days after the cancellation of the charter of the former member
within which to notify the Bank of the former member that the
consolidated institution intends to apply for membership in such Bank.
If the consolidated institution does not so notify the Bank by the end
of the period, the Bank shall require the liquidation of any outstanding
indebtedness owed by the former member, shall settle all outstanding
business transactions with the former member, and shall redeem or
repurchase the Bank stock owned by the former member in accordance with
Sec. 925.29.
(3) Application. If such a consolidated institution has notified the
appropriate Bank of its intent to apply for membership, the consolidated
institution shall submit an application for membership within 60
calendar days of so notifying the Bank. If the consolidated institution
does not submit an application for membership by the end of the period,
the Bank shall require the liquidation of any outstanding indebtedness
owed by the former member, shall settle all outstanding business
transactions with the former member, and shall redeem or repurchase the
Bank stock owned by the former member in accordance with Sec. 925.29.
(4) Outstanding indebtedness. If a member has consolidated into a
nonmember institution, the Bank need not require the former member or
its successor to liquidate any outstanding indebtedness owed to the Bank
or to redeem its Bank stock, as otherwise may be required under Sec.
925.29, during:
(i) The initial 60 calendar-day notification period;
(ii) The 60 calendar-day period following receipt of a notification
that the consolidated institution intends to apply for membership; and
(iii) The period of time during which the Bank processes the
application for membership.
[[Page 118]]
(5) Approval of membership. If the application of such a
consolidated institution is approved, the consolidated institution shall
become a member of that Bank upon the purchase of the amount of Bank
stock required by section 6 of the Act (12 U.S.C. 1426). If a Bank's
capital plan has not taken effect, the amount of stock that the
consolidated institution is required to own shall be as provided in
Sec. 925.20 and Sec. 925.22. If the capital plan for the Bank has
taken effect, the amount of stock that the consolidated institution is
required to own shall be equal to the minimum investment established by
the capital plan for that Bank.
(6) Disapproval of membership. If the Bank disapproves the
application for membership of the consolidated institution, the Bank
shall require the liquidation of any outstanding indebtedness owed by,
and the settlement of all other outstanding business transactions with,
the former member, and shall redeem or repurchase the Bank stock owned
by the former member in accordance with Sec. 925.29.
(c) Dividends on acquired Bank stock. A consolidated institution
shall be entitled to receive dividends on the Bank stock that it
acquires as a result of a consolidation with a member in accordance with
Sec. 931.4(a) of this chapter.
(d) Stock transfers. With regard to any transfer of Bank stock from
a disappearing member to the surviving or consolidated member, as
appropriate, for which the approval of the Finance Board is required
pursuant to section 6(f) of the Act (12 U.S.C. 1426(f)), as in effect
prior to November 12, 1999, such transfer shall be deemed to be approved
by the Finance Board by compliance in all applicable respects with the
requirements of this section.
(The Office of Management and Budget has approved the information
collection contained in this section and assigned control number 3069-
0004 with an expiration date of April 30, 2001)
[66 FR 8308, Jan. 30, 2001, as amended at 67 FR 12849, Mar. 20, 2002]
Subpart F_Withdrawal and Removal From Membership
Source: 58 FR 43542, Aug. 17, 1993, unless otherwise noted.
Redesignated at 61 FR 42542, Aug. 16, 1996.
Sec. 925.26 Voluntary withdrawal from membership.
(a) In general. (1) Any institution may withdraw from membership by
providing to the Bank written notice of its intent to withdraw from
membership. A member that has so notified its Bank shall be entitled to
have continued access to the benefits of membership until the effective
date of its withdrawal, but the Bank need not commit to providing any
further services, including advances, to a withdrawing member that would
mature or otherwise terminate subsequent to the effective date of the
withdrawal. A member may cancel its notice of withdrawal at any time
prior to its effective date by providing a written cancellation notice
to the Bank. A Bank may impose a fee on a member that cancels a notice
of withdrawal, provided that the fee or the manner of its calculation is
specified in the Bank's capital plan.
(2) A Bank shall notify the Finance Board within 10 calendar days of
receipt of any notice of withdrawal or notice of cancellation of
withdrawal from membership.
(b) Effective date of withdrawal. The membership of an institution
that has submitted a notice of withdrawal shall terminate as of the date
on which the last of the applicable stock redemption periods ends for
the stock that the member is required to hold, as of the date that the
notice of withdrawal is submitted, under the terms of a Bank's capital
plan as a condition of membership, unless the institution has cancelled
its notice of withdrawal prior to the effective date of the termination
of its membership.
(c) Stock redemption periods. The receipt by a Bank of a notice of
withdrawal shall commence the applicable 6-month and 5-year stock
redemption periods, respectively, for all of the Class A and Class B
stock held by that member that is not already subject to a pending
request for redemption. In
[[Page 119]]
the case of an institution the membership of which has been terminated
as a result of a merger or other consolidation into a nonmember or into
a member of another Bank, the applicable stock redemption periods for
any stock that is not subject to a pending notice of redemption shall be
deemed to commence on the date on which the charter of the former member
is cancelled.
(d) Certification. No institution may withdraw from membership
unless, on the date that the membership is to terminate, there is in
effect a certification from the Finance Board that the withdrawal of a
member will not cause the Bank System to fail to satisfy its
requirements under section 21B(f)(2)(C) of the Act (12 U.S.C.
1441b(f)(2)(C)) to contribute toward the interest payments owed on
obligations issued by the Resolution Funding Corporation.
(The Office of Management and Budget has approved the information
collection contained in this section and assigned control number 3069-
0004 with an expiration date of April 30, 2001)
[66 FR 8309, Jan. 30, 2001, as amended at 66 FR 54107, Oct. 26, 2001; 67
FR 12849, Mar. 20, 2002]
Sec. 925.27 Involuntary termination of membership.
(a) Grounds. The board of directors of a Bank may terminate the
membership of any institution that:
(1) Fails to comply with any requirement of the Act, any regulation
adopted by the Finance Board, or any requirement of the Bank's capital
plan;
(2) Becomes insolvent or otherwise subject to the appointment of a
conservator, receiver, or other legal custodian under federal or state
law; or
(3) Would jeopardize the safety or soundness of the Bank if it were
to remain a member.
(b) Stock redemption periods. The applicable 6-month and 5-year
stock redemption periods, respectively, for all of the Class A and Class
B stock owned by a member and not already subject to a pending request
for redemption, shall commence on the date that the Bank terminates the
institution's membership.
(c) Membership rights. An institution whose membership is terminated
involuntarily under this section shall cease being a member as of the
date on which the board of directors of the Bank acts to terminate the
membership, and the institution shall have no right to obtain any of the
benefits of membership after that date, but shall be entitled to receive
any dividends declared on its stock until the stock is redeemed or
repurchased by the Bank.
[66 FR 8309, Jan. 30, 2001, as amended at 66 FR 54107, Oct. 26, 2001]
Subpart G_Orderly Liquidation of Advances and Redemption of Stock
Sec. 925.29 Disposition of claims.
(a) In general. If an institution withdraws from membership or its
membership is otherwise terminated, the Bank shall determine an orderly
manner for liquidating all outstanding indebtedness owed by that member
to the Bank and for settling all other claims against the member. After
all such obligations and claims have been extinguished or settled, the
Bank shall return to the member all collateral pledged by the member to
the Bank to secure its obligations to the Bank.
(b) Bank stock. If an institution that has withdrawn from membership
or that otherwise has had its membership terminated remains indebted to
the Bank or has outstanding any business transactions with the Bank
after the effective date of its termination of membership, the Bank
shall not redeem or repurchase any Bank stock that is required to
support the indebtedness or the business transactions until after all
such indebtedness and business transactions have been extinguished or
settled.
[66 FR 8310, Jan. 30, 2001]
Subpart H_Reacquisition of Membership
Sec. 925.30 Readmission to membership.
(a) In general. An institution that has withdrawn from membership or
otherwise has had its membership terminated and which has divested all
of its shares of Bank stock, may not be readmitted to membership in any
Bank, or acquire any capital stock of any
[[Page 120]]
Bank, for a period of 5 years from the date on which its membership
terminated and it divested all of its shares of Bank stock.
(b) Exceptions. An institution that transfers membership between two
Banks without interruption shall not be deemed to have withdrawn from
Bank membership or had its membership terminated. Any institution that
withdrew from Bank membership prior to December 31, 1997, and for which
the 5-year period has not expired, may apply for membership in a Bank at
any time, subject to the approval of the Finance Board and the
requirements of this part 925.
[66 FR 8310, Jan. 30, 2001]
Subpart I_Bank Access to Information
Sec. 925.31 Reports and examinations.
As a condition precedent to Bank membership, each member:
(a) Consents to such examinations as the Bank or the Finance Board
may require for purposes of the Act;
(b) Agrees that reports of examinations by local, state or federal
agencies or institutions may be furnished by such authorities to the
Bank or the Finance Board upon request;
(c) Agrees to give the Bank or the appropriate Federal banking
agency, upon request, such information as the Bank or the appropriate
Federal banking agency may need to compile and publish cost of funds
indices and to publish other reports or statistical summaries pertaining
to the activities of Bank members;
(d) Agrees to provide the Bank with calendar year-end financial data
each year, for purposes of making the calculation described in Sec.
925.22(b)(1) of this part; and
(e) Agrees to provide the Bank with copies of reports of condition
and operations required to be filed with the member's appropriate
Federal banking agency, if applicable, within 20 calendar days of
filing, as well as copies of any annual report of condition and
operations required to be filed.
(The information collection requirements contained in this section have
been approved where applicable by the Office of Management and Budget
under control number 3069-0004)
[58 FR 43542, Aug. 17, 1993; 58 FR 50837, Sept. 29, 1993; 58 FR 53023,
Oct. 13, 1993. Redesignated and amended at 61 FR 42542, 42549, Aug. 16,
1996; 65 FR 8262, Feb. 18, 2000; 67 FR 12849, Mar. 20, 2002]
Subpart J_Membership Insignia
Sec. 925.32 Official membership insignia.
Members may display the approved insignia of membership on their
documents, advertising and quarters, and likewise use the words ``Member
Federal Home Loan Bank System.''
[58 FR 43542, Aug. 17, 1993. Redesignated at 61 FR 42542, Aug. 16, 1996]
PART 926_FEDERAL HOME LOAN BANK HOUSING ASSOCIATES--Table of Contents
Sec.
926.1 Definitions.
926.2 Bank authority to make advances to housing associates.
926.3 Housing associate eligibility requirements.
926.4 Satisfaction of eligibility requirements.
926.5 Housing associate application process.
926.6 Appeals.
Authority: 12 U.S.C. 1422b(a), 1430b.
Source: 65 FR 44426, July 18, 2000, unless otherwise noted.
Sec. 926.1 Definitions.
As used in this part:
Governmental agency means the governor, legislature, and any other
component of a federal, state, local, tribal, or Alaskan native village
government with authority to act for or on behalf of that government.
State housing finance agency or SHFA means:
(1) A public agency, authority, or publicly sponsored corporation
that serves as an instrumentality of any state or political subdivision
of any state, and functions as a source of residential mortgage loan
financing in that state; or
[[Page 121]]
(2) A legally established agency, authority, corporation, or
organization that serves as an instrumentality of any Indian tribe,
band, group, nation, community, or Alaskan Native village recognized by
the United States or any state, and functions as a source of residential
mortgage loan financing for the Indian or Alaskan Native community.
[65 FR 44426, July 18, 2000, as amended at 67 FR 12849, Mar. 20, 2002]
Sec. 926.2 Bank authority to make advances to housing associates.
Subject to the provisions of the Act and part 950 of this chapter, a
Bank may make advances to an entity that is not a member of the Bank if
the Bank has certified the entity as a housing associate under the
provisions of this part.
Sec. 926.3 Housing associate eligibility requirements.
(a) General. A Bank may certify as a housing associate any applicant
that meets the following requirements, as determined using the criteria
set forth in Sec. 926.4:
(1) The applicant is approved under title II of the National Housing
Act (12 U.S.C. 1707, et seq.);
(2) The applicant is a chartered institution having succession;
(3) The applicant is subject to the inspection and supervision of
some governmental agency;
(4) The principal activity of the applicant in the mortgage field
consists of lending its own funds; and
(5) The financial condition of the applicant is such that advances
may be safely made to it.
(b) State housing finance agencies. In addition to meeting the
requirements in paragraph (a) of this section, any applicant seeking
access to advances as a SHFA pursuant to Sec. 950.17(b)(2) of this
chapter shall provide evidence satisfactory to the Bank, such as a copy
of, or a citation to, the statutes and/or regulations describing the
applicant's structure and responsibilities, that the applicant is a
state housing finance agency as defined in Sec. 926.1.
Sec. 926.4 Satisfaction of eligibility requirements.
(a) HUD approval requirement. An applicant shall be deemed to meet
the requirement in section 10b(a) of the Act (12 U.S.C. 1430b(a)) and
Sec. 926.3(a)(1) that it be approved under title II of the National
Housing Act if it submits a current HUD Yearly Verification Report or
other documentation issued by HUD stating that the Federal Housing
Administration of HUD has approved the applicant as a mortgagee.
(b) Charter requirement. An applicant shall be deemed to meet the
requirement in section 10b(a) of the Act and Sec. 926.3(a)(2) that it
be a chartered institution having succession if it provides evidence
satisfactory to the Bank, such as a copy of, or a citation to, the
statutes and/or regulations under which the applicant was created, that:
(1) The applicant is a government agency; or
(2) The applicant is chartered under state, federal, local, tribal,
or Alaskan Native village law as a corporation or other entity that has
rights, characteristics, and powers under applicable law similar to
those granted a corporation.
(c) Inspection and supervision requirement. (1) An applicant shall
be deemed to meet the inspection and supervision requirement in section
10b(a) of the Act (12 U.S.C. 1430b(a)) and Sec. 926.3(a)(3) if it
provides evidence satisfactory to the Bank, such as a copy of, or a
citation to, relevant statutes and/or regulations, that, pursuant to
statute or regulation, the applicant is subject to the inspection and
supervision of a federal, state, local, tribal, or Alaskan native
village governmental agency.
(2) An applicant shall be deemed to meet the inspection requirement
if there is a statutory or regulatory requirement that the applicant be
audited or examined periodically by a governmental agency or by an
external auditor.
(3) An applicant shall be deemed to meet the supervision requirement
if the governmental agency has statutory or regulatory authority to
remove an applicant's officers or directors for cause or otherwise
exercise enforcement or administrative control over actions of the
applicant.
[[Page 122]]
(d) Mortgage activity requirement. An applicant shall be deemed to
meet the mortgage activity requirement in section 10b(a) of the Act (12
U.S.C. 1430b(a)) and Sec. 926.3(a)(4) if it provides documentary
evidence satisfactory to the Bank, such as a financial statement or
other financial documents that include the applicant's mortgage loan
assets and their funding liabilities, that it lends its own funds as its
principal activity in the mortgage field. For purposes of this
paragraph, lending funds includes, but is not limited to, the purchase
of whole mortgage loans. In the case of a federal, state, local, tribal,
or Alaskan Native village government agency, appropriated funds shall be
considered an applicant's own funds. An applicant shall be deemed to
satisfy this requirement notwithstanding that the majority of its
operations are unrelated to mortgage lending if its mortgage activity
conforms to this requirement. An applicant that acts principally as a
broker for others making mortgage loans, or whose principal activity is
to make mortgage loans for the account of others, does not meet this
requirement.
(e) Financial condition requirement. An applicant shall be deemed to
meet the financial condition requirement in Sec. 926.3(a)(5) if the
Bank determines that advances may be safely made to the applicant. The
applicant shall submit to the Bank copies of its most recent regulatory
audit or examination report, or external audit report, and any other
documentary evidence, such as financial or other information, that the
Bank may require to make the determination.
(The Office of Management and Budget has approved the information
collection contained in this section and assigned control number 3069-
0005 with an expiration date of November 30, 2002.)
[65 FR 44426, July 18, 2000, as amended at 67 FR 12849, Mar. 20, 2002]
Sec. 926.5 Housing associate application process.
(a) Authority. The Banks are authorized to approve or deny all
applications for certification as a housing associate, subject to the
requirements of the Act and this part. A Bank may delegate the authority
to approve applications for certification as a housing associate only to
a committee of the Bank's board of directors, the Bank president, or a
senior officer who reports directly to the Bank president other than an
officer with responsibility for business development.
(b) Application requirements. An applicant for certification as a
housing associate shall submit an application that satisfies the
requirements of the Act and this part to the Bank of the district in
which the applicant's principal place of business, as determined in
accordance with part 925 of this chapter, is located.
(c) Bank decision process--(1) Action on applications. A Bank shall
approve or deny an application for certification as a housing associate
within 60 calendar days of the date the Bank deems the application to be
complete. A Bank shall deem an application complete, and so notify the
applicant in writing, when it has obtained all of the information
required by this part and any other information it deems necessary to
process the application. If a Bank determines during the review process
that additional information is necessary to process the application, the
Bank may deem the application incomplete and stop the 60-day time period
by providing written notice to the applicant. When the Bank receives the
additional information, it shall again deem the application complete, so
notify the applicant in writing, and resume the 60-day time period where
it stopped.
(2) Decision on applications. The Bank or a duly delegated committee
of the Bank's board of directors, the Bank president, or a senior
officer who reports directly to the Bank president other than an officer
with responsibility for business development shall approve, or the board
of directors of a Bank shall deny, each application for certification as
a housing associate by a written decision resolution stating the grounds
for the decision. Within three business days of a Bank's decision on an
application, the Bank shall provide the applicant and the Finance Board
with a copy of the Bank's decision resolution.
[[Page 123]]
(3) File. The Bank shall maintain a certification file for each
applicant for at least three years after the date the Bank decides
whether to approve or deny certification or the date the Finance Board
resolves any appeal, whichever is later. At a minimum, the certification
file shall include all documents submitted by the applicant or otherwise
obtained or generated by the Bank concerning the applicant, all
documents the Bank relied upon in making its determination regarding
certification, including copies of statutes and regulations, and the
decision resolution.
(The Office of Management and Budget has approved the information
collection contained in this section and assigned control number 3069-
0005 with an expiration date of November 30, 2002.)
Sec. 926.6 Appeals.
(a) General. Within 90 calendar days of the date of a Bank's
decision to deny an application for certification as a housing
associate, the applicant may submit a written appeal to the Finance
Board that includes the Bank's decision resolution and a statement of
the basis for the appeal with sufficient facts, information, analysis,
and explanation to support the applicant's position. Appeals shall be
sent to the Federal Housing Finance Board, 1777 F Street, NW,
Washington, DC 20006, with a copy to the Bank.
(b) Record for appeal. Upon receiving a copy of an appeal, the Bank
whose action has been appealed shall provide to the Finance Board a
complete copy of the applicant's certification file maintained by the
Bank under Sec. 926.5(c)(3). Until the Finance Board resolves the
appeal, the Bank shall promptly provide to the Finance Board any
relevant new materials it receives. The Finance Board may request
additional information or further supporting arguments from the
applicant, the Bank, or any other party that the Finance Board deems
appropriate.
(c) Deciding appeals. Within 90 calendar days of the date an
applicant files an appeal with the Finance Board, the Finance Board
shall consider the record for appeal described in paragraph (b) of this
section and resolve the appeal based on the requirements of the Act and
this part.
(The Office of Management and Budget has approved the information
collection contained in this section and assigned control number 3069-
0005 with an expiration date of November 30, 2002.)
[[Page 124]]
SUBCHAPTER E_FEDERAL HOME LOAN BANK RISK MANAGEMENT AND CAPITAL
STANDARDS
PART 930_DEFINITIONS APPLYING TO RISK MANAGEMENT AND CAPITAL
REGULATIONS--Table of Contents
Authority: 12 U.S.C. 1422a(a)(3), 1422b(a), 1426, 1440, 1443, 1446.
Sec. 930.1 Definitions.
As used in this subchapter:
Affiliated counterparty means a counterparty of a Bank that
controls, is controlled by or is under common control with another
counterparty of the Bank. For the purposes of this definition only,
direct or indirect ownership (including beneficial ownership) of more
than 50 percent of the voting securities or voting interests of an
entity constitutes control.
Certain drawdown means a legally binding agreement that commits the
Bank to make an advance or acquire a loan, at or by a specified future
date.
Charges against the capital of the Bank means an other than
temporary decline in the Bank's total equity that causes the value of
total equity to fall below the Bank's aggregate capital stock amount.
Class A stock means capital stock issued by a Bank, including
subclasses, that has the characteristics specified by Sec. 931.1(a) of
this subchapter.
Class B stock means capital stock issued by a Bank, including
subclasses, that has the characteristics specified by Sec. 931.1(b) of
this subchapter.
Contingency liquidity means the sources of cash a Bank may use to
meet its operational requirements when its access to the capital markets
is impeded, and includes:
(1) Marketable assets with a maturity of one year or less;
(2) Self-liquidating assets with a maturity of seven days or less;
(3) Assets that are generally accepted as collateral in the
repurchase agreement market; and
(4) Irrevocable lines of credit from financial institutions rated
not lower than the second highest credit rating category by an NRSRO.
Credit derivative contract means a derivative contract that
transfers credit risk.
Credit risk means the risk that the market value, or estimated fair
value if market value is not available, of an obligation will decline as
a result of deterioration in creditworthiness.
Derivative contract means generally a financial contract the value
of which is derived from the values of one or more underlying assets,
reference rates, or indices of asset values, or credit-related events.
Derivative contracts include interest rate, foreign exchange rate,
equity, precious metals, commodity, and credit contracts, and any other
instruments that pose similar risks.
Excess stock means that amount of capital stock of a Bank held by a
member in excess of the minimum investment in Bank stock required by
Sec. 931.3 of this chapter.
Exchange rate contracts include cross-currency interest-rate swaps,
forward foreign exchange rate contracts, currency options purchased, and
any similar instruments that give rise to similar risks.
General allowance for losses means an allowance established by a
Bank in accordance with GAAP for losses, but which does not include any
amounts held against specific assets of the Bank.
Government Sponsored Enterprise, or GSE, means a United States
Government-sponsored agency or instrumentality originally established or
chartered to serve public purposes specified by the United States
Congress, but whose obligations are not obligations of the United States
and are not guaranteed by the United States.
Interest rate contracts include, single currency interest-rate
swaps, basis swaps, forward rate agreements, interest-rate options, and
any similar instrument that gives rise to similar risks, including when-
issued securities.
Investment grade means:
(1) A credit quality rating in one of the four highest credit rating
categories by an NRSRO and not below
[[Page 125]]
the fourth highest rating category by any NRSRO; or
(2) If there is no credit quality rating by an NRSRO, a
determination by a Bank that the issuer, asset or instrument is the
credit equivalent of investment grade using credit rating standards
available from an NRSRO or other similar standards.
Market risk means the risk that the market value, or estimated fair
value if market value is not available, of a Bank's portfolio will
decline as a result of changes in interest rates, foreign exchange
rates, equity and commodity prices.
Marketable means, with respect to an asset, that the asset can be
sold with reasonable promptness at a price that corresponds reasonably
to its fair value.
Market value at risk is the loss in the market value of a Bank's
portfolio measured from a base line case, where the loss is estimated in
accordance with Sec. 932.5 of this chapter.
Minimum investment means the minimum amount of Class A and/or Class
B stock that a member is required to own in order to be a member of a
Bank and in order to obtain advances and to engage in other business
activities with the Bank in accordance with Sec. 931.3 of this chapter.
Operations risk means the risk of an unexpected loss to a Bank
resulting from human error, fraud, unenforceability of legal contracts,
or deficiencies in internal controls or information systems.
Permanent capital means the retained earnings of a Bank, determined
in accordance with GAAP, plus the amount paid-in for the Bank's Class B
stock.
Redeem or Redemption means the acquisition by a Bank of its
outstanding Class A or Class B stock at par value following the
expiration of the six-month or five-year statutory redemption period,
respectively, for the stock.
Regulatory risk-based capital requirement means the amount of
permanent capital that a Bank is required to maintain in accordance with
Sec. 932.3 of this chapter.
Regulatory total capital requirement means the amount of total
capital that a Bank is required to maintain in accordance with Sec.
932.2 of this chapter.
Repurchase means the acquisition by a Bank of excess stock prior to
the expiration of the six-month or five-year statutory redemption period
for the stock.
Repurchase agreement means an agreement between a seller and a buyer
whereby the seller agrees to repurchase a security or similar securities
at an agreed upon price, with or without a stated time for repurchase.
Sales of federal funds subject to a continuing contract means an
overnight federal funds loan that is automatically renewed each day
unless terminated by either the lender or the borrower.
Total assets means the total assets of a Bank, as determined in
accordance with GAAP.
Total capital of a Bank means the sum of permanent capital, the
amounts paid-in for Class A stock, the amount of any general allowance
for losses, and the amount of other instruments identified in a Bank's
capital plan that the Finance Board has determined to be available to
absorb losses incurred by such Bank.
Walkaway clause means a provision in a bilateral netting contract
that permits a nondefaulting counterparty to make a lower payment than
it would make otherwise under the bilateral netting contract, or no
payment at all, to a defaulter or the estate of a defaulter, even if the
defaulter or the estate of the defaulter is a net creditor under the
bilateral netting contract.
[66 FR 8310, Jan. 30, 2001, as amended at 66 FR 54107, Oct. 26, 2001; 66
FR 66728, Dec. 27, 2001; 67 FR 12849, Mar. 20, 2002]